Sprouts, Winco Foods, Smart & Final and Costco H

DINNERS/ENTREES X BEVERAGES X SNACKS X PIZZA X DESSERTS SEPTEMBER 2015

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AheadIn the race to expand of into newthe markets — Packor deeper into existing ones — Sprouts, WinCo Foods, Smart & Final and Costco have moved into the lead.

CARL JORGENSEN TODD HALE JOHNNY HARRIS LIZ HAWBLITZEL ON GROWING ON URBANIZATION ON ‘SCROUNDS’ ON ‘LIZGISTICS’ AND ORGANICS AND TINY HOUSES IN THE DAIRY CASE TAKING CHANCES PAGE 20 PAGE 22 PAGE 24 PAGE 62

TABLE OF CONTENTS

C O V E R S T O R Y AHEAD OF THE PACK 26 In the race to expand into new markets — or deeper into existing ones — Sprouts, WinCo Foods, Smart & Final and Costco have moved into the lead.

THE FRONT END

6 OUT WARREN’S WAY Big Data & Big BS: a dangerous com- T H E D ATA B A N K bination when it comes to pricing. 10 The latest and greatest sales data 8 NEW PRODUCTS from IRI, courtesy of From ice cream cake to iced coffee, Peter Penguin, Bessie we’ve gathered a wide array of must- Bovine and Delano have food and drink. Deli.

Bessie’s photo credit: © Can Stock Photo Inc. / phototrekker UPFRONT Peter’s photo credit: 18 © Can Stock Photo Inc. / Clivia Private label FDR’s photo credit: expected to grow © Can Stock Photo Inc. /bberry in dairy and deli. Plus, information CATEGORY SPOTLIGHTS and advice on growing organics. 36 POISED FOR A COMEBACK Although sales were down slightly, a slew of better-for-you, 22 COOL INSIGHTS clean-label newcomers could Urbanization and breathe new life into the frozen tiny houses could dinners/entrees category. have a major impact on our 40 DRINK UP! industry, says The refrigerated juice segment Todd Hale. registered a 1.0% gain, but milk sales are down. Protein- enhanced products and non- 24 JOHNNY’S dairy alternatives could spark a COLUMN turnaround. Johnny says it might 44 SNACKS JUMP 6.2% be time for more All-day snacking — even at ‘scrounds.’ breakfast — is driving growth. But unique, ethnic and vegetarian options could take the category even higher.

(Continued on page 4)

SEPTEMBER 2015 www.frbuyer.com 3 TABLECOVERTABLE OF OFSTORY CONTENTSCONTENTS

(Continued from page 3) CATEGORY SPOTLIGHTS 46 PIZZA MOVES UPSCALE Millennials are helping retailers pull more dollars from fewer units.

55 FROZEN CHEESECAKE UP 3.4% The rest of the desserts category struggled, but a cluster of new single- serve, seasonal and better-for-you offerings may help turn things around.

LOGISTICS

59 Google Glass eyes role in logistics, Dean GETTING PERSONAL Foods CEO on logistics costs and more news from around the industry. Plus, what How one woman took a gamble (and won) do the experts think about Walmart’s plan 62 in the male-dominated logistics business. to shift more inventory to DCs?

A recent readership study done for us by Litchfi eld Research shows that you like what you’ve been seeing. When compared against Progressive Grocer, Supermarket 6 YEARS & News and Grocery Headquarters, you prefer Frozen & Refrigerated Buyer by a wide margin. You say our magazine provides the most practical information, is the most COUNTING engaging to read, and that you would read us fi rst if all the publications came at once. With thanks to our readers and advertisers. Further, you read us more con- sistently, and spend more time hanks to all of you, we’ve just completed our with us than our competitors. sixth year of publishing Frozen & Refrigerated Typical verbatim comments from TBuyer. In that time, we’ve become the domi- the readership study: “More spe- nant magazine in the industry, won eight national and cifi c to dairy/frozen than anyone regional awards for editorial excellence and built a else,” “I have used it many times strong community of readers. to fi nd new items to add to my stores,” and “A good job of being ‘You say our magazine provides objective.” the most practical information and We’re proud of our track re- Paul Chapa cord, but we aren’t resting on our is the most engaging to read… ’ laurels as we prepare to enter 2016. Got any questions or comments? Suggestions for improvement? Story ideas? All of you care about furthering the industry and help- Please contact me at 913-481-5060 or [email protected]. ing it grow. Our goal here, from the start, has been to ! e way we see it, it’s your magazine. ! anks for your produce a vehicle where friends meet, friends are made continued support. Q and business gets done. ! at’s not just rhetoric; it defi nes us. And with your help, we think we have succeeded. —Paul Chapa, co-founder, sales director

4 www.frbuyer.com SEPTEMBER 2015 15-10033 Refrig Frzn Bev_BALNCE_PROD.pdf 1 8/20/15 4:10 PM OUT WARREN’S WAY

don’t even want to hear suggested retail prices: “Yeah, like I need them BIG DATA to tell me what to sell it for, right?” VOLUME 7 ISSUE 2 Well, at the risk of really tick- Warren Thayer & BIG BS ing some of you off … maybe you Editorial Director, Managing Partner do. Last month, my pals at IRI put [email protected] It’s a dangerous combination when together a white paper called “Drive 603-252-0507 it comes to pricing. Margin Growth of 1 to 3 Percent Paul Chapa with Collaborative Pricing Strate- ome retailers are getting a Sales Director, Managing Partner gies.” You can get it free at www. [email protected] tad overconfi dent about their iriworldwide.com; at the top of the 913-481-5060 Spricing programs. ! ey’re page, click on Insights, and then on regressing into tactics Denise Leathers Publications. Editor to reach short-term cat- Now, I’m all in fa- [email protected] egory margin goals or vor of retailers min- 215-489-5090 quick hits for knee-jerk ing their own data Janet Matz competitive reasons. and honing their Art Director ! ere are several analytical skills. [email protected] reasons why long-term Hey, algorithms can strategy is taking a back Michelle Jones-Silva be a blast. But if seat to quick fi xes. First, Sales Manager you’re a retailer who [email protected] there’s the need to please doesn’t even listen Wall Street every three Contributing Editors: to ideas off ered by months. Second, there’s Johnny Harris, Todd Hale, vendors — especial- Dan Raftery, Mike Friedman, pricing software now that is pretty ly about pricing — you’re shooting Chef Rick Tarantino, Adrienne darn good — but only if it is used yourself in the instep. (You’re prob- Nadeau, and Keilly Witman. correctly. And third is the lack of ably an arrogant little drip, too.) trust between trading partners, so EDITORIAL ADVISORY BOARD that even honest attempts at the $10 MILLION Dan Raftery, time-honored fantasy of win-win EARNINGS GAINS Raftery Resource Network are often scuttled before the dance At bottom, pricing makes you Bob Anderson, former vp of even begins. Simply put, you can or breaks you. You either lose a private label, Wal-Mart never tell who’s fudging the num- sale with too high a price, or lose bers or just plain lying. Johnny Harris, margin with too low a price. IRI’s Johnny L. Harris Consulting Despite all the talk of “partner- research says that for a typical $1 ship,” too many vendors continue to Skip Shaw, National Frozen billion CPG retailer, a 1% improve- be self-serving with their category & Refrigerated Foods Association ment in price yields net earnings management presentations and Ellen Schmitz, IRI gains of $10 million. ! at same 1% “consumer insights.” If I had my improvement in merchandising Kraig Naasz, way, they’d be required to wear American Frozen Food Institute costs yields just under $8 million, warning labels during sales calls, and for operating costs, it yields Corey Rosenbusch, since they’ve become so adept at under $2 million. Global Cold Chain Alliance misleading “interpretations” of What’s more, price per volume Published by CT Media Partners, “data” when they are “just trying to has shifted in some key categories Postmaster: Send address changes to be helpful.” CT Media Partners, PO Box 1564, since 2011, according to IRI. It’s “Baffl e ‘em with BS” is not a new Norwich, VT 05055 amazing to see the shifts in yogurt, tactic among many vendors. But juices, meat and seafood across their “Big Data” is resulting in “Big diff erent distribution channels. BS,” and if you think retailers aren’t So check out that IRI study. ! is onto that shell game, well… when column was brought to you as a free your IQ reaches 60, you should public service by Frozen & Refriger- probably sell. ated Buyer. ! e lack of transparency and trust has made many retailers tap more deeply into their own scanner data and pony up for pricing soft- Warren ! ayer, Editor ware. Retailers often tell me, with [email protected] irritation in their voices, that they

6 www.frbuyer.com SEPTEMBER 2015 14-4602_FDBAd2012_fp.pdf 1 September/21/12 2:11 PM

CMY

T. Marzetti Company 1105 Schrock Rd. P.O. Box 29163 Columbus, OH 43229-0163 614-846-2232 Fax 614-842-4186 www.marzetti.com www.sisterschuberts.com NEW PRODUCTS

Peanuts Ice Cream Cakes wrapped organic ice cream sandwiches are available in In advance of the November release of The Peanuts Movie, Ginger Wipeout, Strawberry Surfer Girl, Bitchin’ Chocolate Buffalo, N.Y.-based Rich Products Corp. (www.richs.com) Chocolate, Key Lime Cowabunga, Surfi n’ Safari Chocolate debuts a pair of Chip and dairy- and gluten-free DaKine (vegan). Sold singly, Peanuts-themed ice they retail for around $4.99 apiece and come in cases of 12. cream cakes. Avail- able year-round, the Thin-Crust Kosher Pizza Peanuts Everyday Ice Bayonne, N.J.-based Kayco (www.kayco.com) launches Cream Cake features all-natural, kosher-certifi ed artisanal pizzas imported from Snoopy as the Flying Italy. Handmade with extra Ace perched atop virgin olive oil, the com- his doghouse. The pany’s own fresh cheese and 56-ounce, 14-serving hand-stretched dough, the dessert is made with thin-crust, premium-quality chocolate ice cream Tuscanini lineup includes layered with vanilla four wood-fi red classics crunchies and is expected to retail for around $19.99. A and two fl atbreads. Classic second Peanuts Harvest Ice Cream Cake in the shape of fl avors include Classico Mar- the Great Pumpkin features vanilla ice cream and mini gherita, Mushroom, Roasted chocolate chips. Available seasonally, the 48-ounce frozen Vegetable and Four-Cheese dessert serves up to 12 and carries a $14.99 SRP. while fl atbread varieties include Tomato & Cheese and Mushroom. Classic pies Flavored Iced Coffees range from 14.1 to 15 ounces and are packed 12 to a case. Winston-Salem, N.C.- Flatbreads are 7 to 8 ounces and packed 10 to a case. SRP based Krispy Kreme is $5.99 to $9.49. (www.krispykreme. com) brings its ready- Non-Dairy Ice Cream Bars to-drink iced coffees Bliss Unlimited (www.coco to the supermarket nutbliss.com), Eugene, Ore., Q refrigerator. Developed adds a pair of non-dairy ice and distributed by cream bars covered in organic, International Marketing fair-trade chocolate to its Luna Systems, Shelton, Conn., & Larry’s Coconut Bliss lineup. the fl avored coffees Also free of soy and gluten, come in three varieties: Mocha, Vanilla and Caramel. Of- the Non GMO Project-verifi ed fered in aseptic rather than retort packages “for a better- frozen treats come in Salted tasting product,” all three are available in both 10- and Caramel in Chocolate and 32-ounce sizes. Single-serve bottles carry a $1.99 SRP and Coconut Almond in Chocolate come in cases of 12. Multi-serve bottles are expected to fl avors. Made with a short list retail for around $3.99 and are packed six to a case. of simple ingredients, including cholesterol-free coconut milk and naturally low-glycemic agave syrup, the certi- Organic Ice Cream and Novelties fi ed organic, kosher bars come in three-count, 9-ounce Long Beach, Calif.-based Beachy Cream (www.beachy packages that can be merchandised either horizontally or cream.com) offers a line of Southern California-inspired, vertically. Packed 12 to a case, they carry a $6.29 SRP. non-GMO ice cream pints and novelties, now USDA-certifi ed organic. Made in small batches with locally sourced, Dairy- and Soy-Free Cheeses sustainable ingredients and from-scratch fl avorings, the Follow Your Heart (www.follow ice cream comes in eight yourheart.com), Canoga Park, Ca- fl avors: Fresh Mint Brownie lif., debuts a collection of organic, Chunk, Sea Salty Caramel, dairy- and soy-free cheese alterna- Coffee Toffee, Peanut But- tives made with a coconut oil base. ter Fudge Ripple, Roasted Specially formulated to offer the Banana, Vanilla Bean, Choco- creamy texture and “meltability” of late Fudge Ripple and Vegan dairy-based cheeses, the Non GMO Vanilla (made with cashews, Project-verifi ed, vegan lineup in- not soy). SRP is $7.99 per cludes 7-ounce blocks and 7-ounce, pint, and pints are packed 10-count slices (in American, six to a case. Individually Provolone, Mozzarella and Garden

8 www.frbuyer.com SEPTEMBER 2015 Herb fl avors) and 8-ounce shreds (in Mozzarella, Cheddar crafted in small batches from the and Fiesta Blend fl avors). Also free of gluten, preservatives, milk of pasture-raised cows. Rich in lactose and trans fat, the “cheeses” are expected to retail protein and calcium, the non-GMO, for around $4.99 each. Blocks and slices come in cases of 12; vegetarian cheese snacks come in shreds, in cases of eight. two award-winning fl avors: Medium Cheddar and Pepper Jack (Monte- Gluten-Free Breakfast rey Jack with red and green organic Sandwiches jalapenos). Each 4.5-ounce pack- Start Healthy Foods (www. age contains six 0.75-ounce sticks. starthealthyfoods.com), Sioux Packed 12 to a case, they carry a Falls, S.D., expands its better- $5.99 SRP. for-you, grab-and-go breakfast lineup with a collection of glu- Sprouted Grain Wraps ten-free sandwiches. Sold singly, Milwaukee-based Angelic Bakehouse (www.angelicbake the 5.4- to 5.6-ounce handhelds house.com) rolls out premium sprouted grain wraps with feature low-fat turkey, cage- more fi ber and protein than white or whole wheat alterna- free egg whites and reduced fat cheddar tives. Made using a “mash” cheese. Available varieties include Turkey Sausage, method that preserves the Egg Whites and Cheese and Canadian-Style Turkey Bacon, taste and texture of seven real Egg Whites and Cheese, both on either gluten-free bagels fermented grains, including or bialys from Sweet Christine’s Bakery. To prevent cross- ancient grains quinoa and contamination, the sandwiches can be heated in their retail amaranth, the nutrient-rich, sleeves without opening. SRP is $3.79 to $4.59 per sandwich, 100-calorie wraps come in packed 10 to a case. six-count, 9-ounce packages shipped frozen in cases of Organic Snack Cheeses 14. They can be sold frozen, La Farge, Wis.-based Organic Valley (www.organicvalley. refrigerated or at ambient

coop) introduces individually wrapped organic snack sticks temperature. SRP is $3.99. Q

W W W . C A P E C O D S E L E C T . C O M THE DATABANK

FASTEST COOKIE DOUGH $4,655,198 334.7 1,059,018 631.4 1,461,626 300.0 Nestlé USA $3,200,327 * 859,208 * 966,609 * Gregory’s Foods $523,130 28.9 55,713 25.6 183,239 25.1 FROZEN Private Label $308,961 39.5 23,594 58.6 132,968 26.3 BY PETER PENGUIN Signature Foods $272,744 86.8 61,057 94.7 106,849 94.7 Trudeau Distributing Co. $84,879 24.4 15,263 8.7 19,445 9.0 During the 12 weeks ended 600 Lb. Gorillas $77,764 12.1 16,914 16.2 15,286 (4.0) July 12, sales of frozen foods Ruby Snap $61,668 (10.7) 8,439 (15.8) 7,911 (15.8) in supermarkets, drugstores, GNOCCHI $1,246,351 38.4 463,458 37.3 460,529 34.7 mass merchants, military Private Label $404,623 347.2 162,342 423.9 172,559 322.5 commissaries and select club Mama Rosie’s $131,676 (6.1) 56,518 (13.1) 56,518 (13.1) and dollar stores combined totaled $12.35 billion, a 1.2% increase Savignano Foods $72,726 22.6 40,411 28.1 25,257 28.1 compared with the same period a year ago, Seviroli $68,680 (5.5) 33,619 (6.3) 29,122 (6.2) reports Chicago-based market research Lucy’s Foods $64,780 (3.9) 30,791 (3.2) 30,791 (3.2) ﬁ rm IRI (@IRIworldwide). However, units Scaramuzza’s $52,568 11.2 13,981 9.3 13,981 9.3 fell 1.8% to 3.45 billion and volume slid 1.7% SIDE DISHES $87,366,352 36.3 34,802,476 43.8 27,581,154 35.0 to 5.87 billion. Percentage of volume sold Birds Eye Foods $19,823,472 70.7 10,707,516 66.4 7,286,447 65.5 with merchandising support dropped 0.7 Nestlé USA $13,033,532 64.6 4,933,987 64.2 3,996,163 58.4 points to 36.2%. General Mills $11,746,623 52.7 5,554,530 59.1 3,919,391 31.8 For the 52 weeks ended July 12, frozen Heinz $8,544,251 (4.8) 1,663,507 2.9 1,423,537 (0.0) dollars rose 1.3% to $53.05 billion, but Private Label $5,720,806 40.1 2,929,434 39.9 2,133,191 27.8 units tumbled 2.1% to 15.04 billion. Volume ConAgra $3,356,092 149.0 1,103,131 356.7 1,076,986 470.7 decreased 1.4% to 23.49 billion, and volume Ore-Ida $3,041,399 (2.9) 996,246 (2.6) 1,494,369 (2.6) sold with merchandising support dwindled 1.6 points to 34.9%. InnovAsian Cuisine $2,286,193 56.6 650,513 45.8 731,827 45.8 Our chart shows the fastest-growing Old Fashioned Kitchen $1,634,514 5.2 390,469 (3.5) 292,207 (1.4) frozen department subcategories, Shiloh Foods $1,509,234 1.6 619,805 2.8 626,092 2.4 including the leading manufacturers, PIZZA CRUSTS/DOUGH $5,181,808 15.8 1,462,143 (3.1) 1,938,924 16.1 for the 12 weeks ended July 12. Only Private Label $1,448,534 12.6 459,997 (2.3) 556,811 (7.5) subcategories with at least $250,000 Boulder Brands $1,258,302 9.1 236,066 1.7 118,033 1.7 in sales during the period are listed. Rich Products Corp. $405,183 * 20,317 * 391,093 * Manufacturers with less than $50,000 in Stefano Foods $292,309 19.0 145,045 19.7 145,045 19.7 sales are not included. Kinnikinnick Foods $247,371 (25.9) 31,374 (25.4) 41,178 (25.4) Against the Grain Gourmet $205,076 38.7 27,820 36.4 20,865 36.4 Score Tuesday Corp. $180,565 (5.3) 96,149 (5.4) 96,149 (5.4) FACTOIDS Calise & Sons $157,636 16.7 92,914 2.7 92,914 2.7 Guttenplan’s Bakery $123,453 (5.2) 93,101 (5.1) 93,101 (5.1) House of Pasta $93,272 (15.3) 31,836 (20.1) 63,672 (20.1) TRTLL/EGG ROLL/WONTON WRPPRS $620,704 15.2 265,990 7.9 194,365 2.1 $712,462 Quang Tri $242,790 25.3 84,881 21.3 63,757 21.5 Dollar sales racked up by Cole’s Simex International $129,419 4.6 39,957 5.2 33,063 3.3 frozen pretzels, one of the best Ramar International $69,903 (7.5) 35,564 (19.6) 24,450 (19.6) performances by a product in ONION RINGS $14,906,246 13.2 4,592,712 15.6 5,434,946 9.6 distribution less than a year. Despite the brand’s early success ConAgra $4,285,489 88.6 1,508,167 85.5 1,411,034 73.6 (it’s already the segment’s No. 6), Alexia Foods $3,390,838 1.0 939,593 (0.5) 834,894 (0.4) subcategory sales fell 1.2%, due Private Label $3,224,870 (7.3) 1,348,914 (5.1) 1,443,306 (5.8) mostly to a 73.3% loss by Nestle’s Ore-Ida $1,558,947 (4.2) 486,444 (2.8) 533,473 (3.0) Lean Cuisine. Rich Products Corp. $1,544,127 (5.5) 85,897 (5.5) 858,973 (5.5) Signature Foods $359,697 37.1 79,336 39.4 158,672 39.4 McCain Foods $205,952 165.4 59,495 377.4 70,312 128.9 Discount Sales $99,916 18.4 18,294 11.8 40,891 20.3 39.6% Fresh Frozen Foods $73,428 (65.3) 21,510 (67.5) 26,888 (67.5) Percentage of frozen pizza PIEROGI $19,260,512 9.9 6,071,638 5.3 7,271,730 6.1 volume sold with merchandis- Ateeco $15,215,682 9.1 4,654,582 9.4 5,826,497 7.8 ing support during the most BCPI $855,047 251.3 53,241 162.2 159,722 162.2 recent 12 weeks — 6.1 percent- Private Label $666,497 (14.9) 301,030 (19.4) 347,862 (18.6) age points less than a year ago. Poppy’s Pierogies $659,142 (13.2) 596,266 (11.3) 480,267 (10.9) Despite the lack of support, Delicious Fresh Pierogi $591,103 (5.7) 108,393 (12.6) 88,170 (12.6) dollar sales jumped 3.9% (though Kasia’s Polish Deli $321,351 (9.6) 81,895 (20.9) 68,576 (21.3) volume was down 1.1%), as sales Old Fashioned Kitchen $262,520 (0.9) 60,236 (5.4) 60,236 (5.4) shifted to higher-priced, pre- Dudek Delicatessen Foods $165,594 22.2 29,040 23.0 29,040 23.0 mium varieties. Mom & Pop’s Pierogies $99,745 363.3 33,287 650.7 34,075 649.8

10 www.frbuyer.com SEPTEMBER 2015

THE DATABANK

Naleway Foods $98,073 34.3 58,529 34.9 58,529 34.9 2 STUFFED PASTA SHELL $2,293,855 9.4 415,880 8.6 711,916 6.0 Number of minutes it took Seviroli $422,902 21.5 66,830 44.8 142,677 14.6 for world record holder Rob Venda Ravioli $336,120 (3.4) 37,401 (3.4) 149,603 (3.4) Williams to construct a bologna Private Label $253,803 45.8 73,364 45.0 88,345 50.3 sandwich, complete with Rosina Food Products $195,174 (3.2) 51,870 (9.9) 40,526 (9.9) lettuce, tomato, cheese and Pede Brothers $149,358 8.9 36,737 10.6 56,879 10.3 condiments — using only Mama Rosie’s $136,694 0.8 26,264 (1.7) 42,740 (0.2) his feet. The Texan achieved Hain Celestial $118,716 (18.3) 25,450 (30.1) 31,812 (30.1) the feat (no pun intended) in Savignano Foods $110,442 28.0 10,866 28.6 28,523 28.6 November 2000. Lucy’s Foods $103,338 2.4 23,627 2.8 31,011 2.8 Sicilian Chef $87,619 32.4 7,704 21.5 23,111 21.5 ALL OTHER PASTA/NOODLES $5,308,986 7.8 1,835,079 4.2 1,867,125 4.7 -23.5% T. Marzetti Co. $2,662,893 12.9 867,747 14.4 920,722 16.3 Dollar loss by mufﬁ ns (to Private Label $609,392 10.7 204,110 (0.2) 221,723 3.8 $4,221,237), largest by a fro- Rosina Food Products $365,674 (11.0) 165,348 (9.9) 140,043 (20.7) zen subcategory with at least Food City U.S.A. $354,106 10.1 99,681 6.4 89,242 7.0 $2 million in sales during the Savignano Foods $226,054 9.1 91,391 14.6 98,538 11.1 period. Leading manufacturer Seviroli $154,047 (0.3) 74,609 (2.7) 63,299 (1.3) Vitalicious posted a double- Mama Rosie’s $129,722 (9.1) 48,293 (14.9) 60,585 (17.9) digit loss, but watch out for No. Pede Brothers $78,439 (6.3) 57,713 (10.8) 51,222 (11.9) 2 Classic Cooking, maker of the RP’s Pasta Co. $77,238 (16.5) 16,406 (17.5) 9,228 (17.5) Garden Lites brand, up 52.2%. Sidari’s Italian Foods $61,906 (7.3) 20,462 (12.6) 21,907 (10.1) DIPS $3,579,145 7.5 945,266 3.4 514,844 9.0 Heinz $2,994,492 8.9 798,083 5.0 426,044 10.4 Private Label $224,513 8.4 70,831 7.8 35,037 13.0 10 Mrs. Grissom’s Salads $72,811 1,652.2 16,325 1,255.5 12,138 1,915.7 Number of top 20 frozen Phillips Foods $65,821 (37.4) 10,062 (39.2) 6,289 (39.2) subcategories that saw both Gold Star Chili Co. $53,787 (1.8) 12,746 (5.9) 7,966 (5.9) Q dollar sales and volume rise. However, most of the gainers TURKEY/TURKEY SUBSTITUTE $316,290,592 7.4 60,761,472 4.7 89,915,352 3.8 fall between No. 11 and No. 20 — Jennie-O Turkey Store $123,303,496 2.2 22,590,804 0.2 34,874,264 (3.4) and none are in the top ﬁ ve. Private Label $54,265,296 15.6 10,347,398 16.1 14,341,618 15.0 Cargill Meat Solutions $53,901,992 (2.7) 11,140,726 (5.9) 15,387,822 (6.1) Butterball $37,651,908 30.8 6,913,351 24.0 12,134,690 30.0 Perdue Farms $11,520,595 (1.2) 2,887,844 1.4 3,260,114 1.1 55% Foster Farms $10,355,119 3.7 1,912,939 2.4 2,687,987 6.7 Percentage of respondents Plainville Farms $6,522,124 43.8 1,347,262 43.1 1,347,262 43.1 to a 2014 survey who think Harvestland $5,145,279 13.5 1,080,408 14.3 1,217,055 12.4 they’re smarter than the aver- Eaves Packing Co. $3,414,173 82.6 371,913 65.6 913,388 94.4 age American. Only 4% believe Royal Sausage Co. $1,423,437 (40.5) 294,571 (42.9) 568,327 (42.7) they’re less intelligent than CHILI $4,668,830 7.3 1,338,909 5.4 1,528,151 4.5 most while 34% say they’ve El Encanto $968,746 (7.4) 346,545 (5.7) 351,080 (4.0) got average smarts. White men Skyline Chili $845,270 21.9 212,230 23.6 201,787 24.6 were more likely than women, Gold Star Chili Co. $758,094 12.5 274,291 7.3 180,017 7.3 Hispanics or African-Americans Windsor Foods $503,413 5.6 57,535 (2.3) 287,624 (0.7) to believe they’re “much more intelligent.” Dolores Canning Co. $437,467 15.4 109,289 22.6 111,157 19.3 XLNT Foods $272,605 20.3 70,539 5.7 70,539 5.7 Albuquerque Tortilla Co. $206,166 (15.1) 49,065 (9.5) 86,087 (16.6) Young Guns Corp. $131,974 40.3 33,426 41.9 33,426 41.9 -5.0% The Authentic New Mexican $98,308 (2.5) 39,540 (0.2) 34,598 (0.2) Tabatchnick Fine Foods $60,098 (11.5) 24,502 (12.7) 22,970 (12.7) Dollar loss by chicken/chicken substitutes (to $713,987,456), the APPETIZERS/SNACK ROLLS $380,961,216 6.2 86,597,064 2.9 111,107,160 5.2 largest frozen subcategory to For top-10 manufacturer data, see our story on Snacks & Appetizers in this issue. see sales fall 5.0% or more dur- BREAKFAST HANDHELD $228,662,144 5.8 45,548,852 2.1 50,939,196 4.3 ing the period. Unit sales were Hillshire Brands $127,141,648 12.5 17,139,180 10.5 28,810,788 12.0 down even more: -5.6%. The Kellogg’s $23,345,178 28.2 4,067,985 27.9 3,877,486 8.4 decline comes despite a ConAgra $15,731,410 (30.1) 3,155,809 (32.6) 3,399,479 (34.2) 7.5 point increase in volume sold with merchandising support Private Label $12,726,690 9.8 3,595,925 5.3 3,079,255 5.8 (to 39.1%). Nestlé USA $12,640,072 (1.1) 3,901,656 (7.7) 3,229,615 6.6 Ruiz Foods $10,815,180 112.1 4,694,239 49.4 3,191,442 121.2 * Product has been in distribution less than one year.

12 www.frbuyer.com SEPTEMBER 2015 IT’S EAST MEETS WEST MEETS DELICIOUS

Simmering Samurai presents a completely refreshed product line featuring easier-to-prepare, delicious fried rice meals.

AJINOMOTO NORTH AMERICA, INC. | 7124 North Marine Drive, Portland, OR 97203 P: 503.444.2002 | E: [email protected] | ajifrozenusa.com THE DATABANK

FASTEST COFFEE CONCENTRATE $3,029,564 284.7 684,429 417.3 5,122,505 77.4 Kraft Foods $1,730,384 * 489,071 * 792,295 * C&W Beverage $729,141 497.2 108,795 501.2 2,359,163 507.0 DAIRY New Orleans Coffee Co. $465,758 (12.9) 71,687 (13.0) 1,660,752 (16.9) BY BESSIE BOVINE MILK SUBSTITUTES-ALL OTHER $18,435,182 212.6 5,403,684 225.5 18,842,102 372.7 WhiteWave Foods $11,823,088 * 3,607,255 * 14,429,020 * Sales of dairy products in Jackson-Mitchell $3,762,318 7.9 816,032 3.9 1,709,722 4.0 supermarkets, drugstores, mass HP Hood $1,221,782 4.3 366,375 5.3 1,465,501 5.3 merchants, military commissaries Good Karma $690,024 39.2 188,953 42.5 755,811 42.5 and select club and dollar stores Private Label $309,707 1.7 293,668 (2.2) 220,251 (5.1) combined reached $17.69 billion during the 12 weeks ended July 12, a 2.0% Redwood Hill Farm $156,002 78.5 22,415 77.5 44,830 77.5 increase compared with the same period Green Valley Organics $151,154 64.7 27,166 69.2 54,332 69.2 a year ago, reports Chicago-based market C.F. Burger Creamery $141,237 2.3 33,541 (1.8) 67,082 (1.8) research ﬁ rm IRI (@IRIworldwide). Units rose Summerhill Dairy $65,785 50.8 17,565 40.2 35,129 40.2 1.9% to 6.47 billion, but volume slid 0.4% to ALL OTHER FRUIT JUICE $21,160,202 30.3 4,260,769 7.9 110,923,776 29.3 53.75 billion. Percentage of volume sold with POM Wonderful $16,427,440 31.9 3,218,419 2.7 79,071,904 27.8 merchandising support jumped 1.6 points Sambazon $1,408,141 35.6 242,497 58.7 7,199,150 47.2 to 41.6%. Harmless Harvest $801,890 165.1 279,191 153.9 2,401,164 172.9 For the 52 weeks ended July 12, dollar Bolthouse Farms $655,039 (39.2) 74,379 (54.1) 3,867,648 (40.9) sales shot up 4.2% to $79.19 billion and Zico $639,048 * 83,106 * 5,046,614 * units edged up 0.3% to 28.70 billion. Caliﬁ a Farms $496,550 169.6 203,987 91.3 8,023,495 811.6 However, volume tumbled 2.5% to 233.24 William G. Roe & Sons $430,466 50.1 109,081 19.0 3,433,410 18.0 billion, and percentage of volume sold with merchandising support fell 0.1 points to Genesis Today $93,039 (81.7) 15,591 (84.1) 922,509 (82.2) 36.8%. Evolution Juice Harvest Corp. $59,526 (37.2) 9,623 (47.0) 407,312 (29.3) Our chart shows the fastest-growing PEANUT BUTTER $1,068,254 29.6 227,900 25.5 250,273 31.1 dairy subcategories, including the leading Old Home Foods $946,921 33.4 206,328 27.7 221,661 35.2 manufacturers, for the 12 weeks ended Private Label $64,817 (8.9) 10,131 (7.8) 15,240 (11.3) July 12. Only subcategories with at least $250,000 in sales during the period are SALAD TOPPING/BACON BITS $1,137,194 26.0 455,606 19.9 1,859,268 24.2 listed. Manufacturers with less than $50,000 Private Label $492,096 (2.4) 260,765 (3.2) 923,411 (3.3) in sales are not included. DeLallo Packing Co. $455,356 105.0 123,062 110.9 614,690 106.2 Dole Fresh Vegetables $94,768 797.7 42,646 1,107.4 230,985 1,146.8 FACTOIDS FRESH SOUP $40,137,528 21.6 8,097,887 17.2 10,769,736 19.3 Private Label $25,469,700 24.5 5,756,623 19.8 7,556,919 21.9 Panera Bread Co. $11,230,713 21.0 1,724,069 11.9 2,453,312 18.1 Legal Sea Foods $1,065,772 5.9 161,453 19.9 237,772 13.8 Blount Seafood Corp. $461,615 166.2 87,276 334.8 103,417 117.4 $9,465,434 Ivar’s $314,190 6.5 54,727 10.1 67,527 10.8 Dollar sales amassed by Simply Captain Parker’s Chowder Co. $245,031 53.3 24,359 57.0 45,674 57.0 Fruit Punch during the most Bob Evans Farms $193,193 (22.3) 65,401 (28.2) 49,051 (28.2) recent 12 weeks — one of the Rustico Foods $144,812 32.1 21,233 34.7 29,196 35.7 best performances by a product Harry’s Fresh Foods $115,810 (70.0) 25,242 (71.1) 26,052 (75.1) in distribution less than a year. Already No. 7, its early success FRESH EGGS $1,429,337,344 19.3 463,155,360 0.5 6,798,401,536 0.1 helped grow the fruit drink sub- Private Label $745,370,688 18.6 261,663,584 (0.5) 3,768,920,064 (1.1) category 4.4% to $239,449,728, Eggland’s Best $220,964,672 22.0 62,042,908 12.3 820,031,296 12.8 offsetting losses by the top Country Creek Farms $179,950,736 73.1 54,834,936 43.8 957,444,992 49.1 three brands. Cal-Maine Foods $39,620,252 13.6 9,343,516 (7.0) 209,246,144 (7.4) Pete & Gerry’s $17,611,088 87.5 4,202,394 73.2 49,168,248 89.3 Dutch Farms $13,218,528 13.2 5,495,246 (13.5) 72,671,136 (8.9) R.W. Sauder $12,840,956 (9.9) 4,015,356 (8.5) 64,531,576 (31.6) -7.8% Donner Enterprises $10,497,664 19.6 3,031,041 (10.6) 44,674,860 (15.3) Dollar loss by processed/ Rocky Mountain Eggs $10,454,806 48.0 2,815,747 11.6 48,631,456 17.8 imitation cheese slices (to Hillandale Farms $8,986,953 (17.1) 3,782,597 (26.3) 47,148,680 (31.4) $441,993,312), the largest dairy HNDLD NON-BREAKFAST ENTREES $102,470,672 17.6 48,339,816 9.9 20,039,576 14.0 subcategory (except skim milk) Private Label $33,081,736 22.3 8,343,933 17.0 4,711,472 18.6 to see sales fall more than 5.0% Boar’s Head/Brunckhorst $9,675,944 106.9 1,832,645 103.5 1,407,472 101.8 — despite a big jump in volume Hormel Foods $9,566,997 (33.0) 6,007,975 (26.0) 1,006,048 (34.3) sold with merchandising support Camino Real Foods $8,210,166 12.0 20,600,146 15.2 5,265,227 16.5 (to 43.4%). Some of those sales Raybern Quality Foods $7,347,612 1.5 2,743,290 (3.1) 1,578,302 (4.5) may have gone to natural slices, Stefano Foods $2,863,899 213.4 949,637 438.4 521,196 296.9 up 8.3%. Landshire $2,160,745 (9.6) 1,003,694 (12.2) 376,240 (14.8) AdvancePierre Foods $2,044,040 2,587.1 697,470 1,142.9 464,246 2,096.0

14 www.frbuyer.com SEPTEMBER 2015 Organic soups for your most discerning customers

Blount Organic branded soups assure today’s busy, health-conscious parents that they are getting certified organic foods for their families (and themselves). Preparation is as easy as heat-and-serve. Offer our organic soups and build sales in your refrigerated deli section. With Blount, you get more because we do more. To learn more about our premium prepared foods, contact us at 800.274.2526 or visit blountfinefoods.com THE DATABANK

FACTOIDS Hillshire Brands $1,991,214 (15.4) 262,133 (21.5) 429,532 (17.2) MegaMex Foods $1,560,649 (17.4) 484,558 (26.4) 399,016 (21.1) READY-TO-DRINK COFFEE $48,173,008 17.6 12,429,675 11.7 594,705,472 6.2 27% Starbucks Coffee Co. $18,715,014 126.0 3,875,949 123.1 187,412,560 113.6 Percentage of Americans that WhiteWave Foods Co. $18,035,540 (12.2) 4,727,427 (12.4) 297,346,816 (13.9) believe God plays a role in Bolthouse Farms $6,203,257 (1.5) 2,265,329 1.7 47,169,528 2.6 determining which team wins a Caliﬁ a Farms $1,967,307 139.4 511,154 162.2 16,035,864 122.7 sporting event, according to a Private Label $1,631,415 26.0 483,499 24.4 30,943,940 24.4 2013 poll by the Public Religion Stumptown Coffee Roasters $564,530 335.9 149,805 288.3 2,049,398 312.9 Research Institute. More than Prairie Farms Dairy $420,640 7.4 119,260 6.6 7,632,610 6.6 half of those surveyed also Upstate Farms Co-op $186,592 3.8 135,809 1.5 2,172,948 1.5 believe God rewards athletes VEGETABLE JUICE/COCKTAIL $28,288,922 17.5 6,934,037 12.0 205,216,736 12.1 who have faith in him/her. Bolthouse Farms $16,751,521 5.6 4,343,183 3.9 139,312,704 5.2 The Naked Juice Co. $3,704,583 87.7 987,106 42.6 23,756,018 125.7 Odwalla $2,117,157 (12.5) 365,773 (29.6) 21,580,588 (17.8) 101.7% Evolution Juice Harvest Corp. $1,952,209 19.6 385,958 11.7 5,455,917 3.9 Dollar gain by private label Suja Juice $1,218,028 1,259.7 279,123 2,433.1 4,844,961 2,648.1 breakfast entrees (to $1,675,235), Forager Project $496,376 0.7 72,068 (5.1) 1,153,088 (5.1) largest by a store brand dairy Raw Foods International $453,234 75.3 173,564 89.2 2,082,772 89.2 subcategory with at least $1 mil- The Hain Celestial Group $299,104 70.1 31,100 67.7 547,959 88.5 lion in sales. The segment (+5.1% Stewart Bros. $160,907 (1.2) 38,242 0.1 622,622 0.3 to $9,573,770) also got a nice Arden’s Garden $157,510 (1.2) 48,334 2.0 755,499 1.9 boost from top-seller Odom’s Tennessee Pride (+20.2%). EGG WHITE SUBSTITUTES $44,343,300 14.8 10,706,652 7.5 12,156,697 12.0 Crystal Farms $19,035,064 389.2 4,581,703 234.9 4,663,289 217.7 Private Label $18,266,792 16.3 4,523,377 3.3 5,182,161 6.0 ConAgra $3,953,248 5.0 1,032,785 0.7 1,349,076 31.5 2 Eggland’s Best $1,859,800 44.6 341,494 54.3 658,211 37.1 Number of top 20 dairy subcat- Pete & Gerry’s $479,586 125.3 76,668 160.4 153,336 160.4

egories (in dollars) that also rank Organic Valley $320,972 (29.0) 50,636 (32.5) 50,636 (32.5) Q among the top 20 gainers: No. Abbotsford Farms $175,359 20.8 45,093 17.2 45,093 17.2 2 fresh eggs (+19.3%) and No. 17 Nulaid Foods $100,114 (4.3) 23,981 (7.4) 23,981 (7.4) refrigerated teas (+14.8%). But Eggology Inc. $76,844 (26.5) 11,368 (28.9) 11,368 (28.9) only teas saw signiﬁ cant volume TEAS $219,566,464 14.8 100,406,688 12.7 7,796,210,688 7.6 (+7.6%) and unit sales (+12.7%) Coca-Cola Co. $53,327,976 29.3 22,788,962 28.1 1,464,583,808 30.8 gains as well. Private Label $31,943,664 11.2 19,130,188 9.2 1,585,928,960 2.8 Red Diamond $28,079,956 (3.2) 11,846,389 (1.8) 1,268,369,408 (3.4) Turkey Hill Dairy $27,343,416 7.8 14,395,356 5.2 1,183,916,928 9.1 20 Milo’s Tea Co. $20,221,422 17.7 8,182,040 20.7 833,227,968 17.6 Millennium Products $15,073,341 45.1 4,499,634 39.2 72,718,648 39.4 Average number of Americans Swiss Premium Dairy $8,840,276 (11.3) 4,222,486 (14.0) 426,493,888 (13.0) killed each year by cows (mostly Pepsi-Lipton Tea Partnership $7,316,849 22.8 3,400,603 27.0 200,635,568 27.0 from blunt force trauma), making them way more dangerous Bolthouse Farms $7,046,318 0.3 2,036,194 3.0 56,894,500 1.4 than sharks, which average just POM Wonderful $2,558,461 102.4 1,485,394 164.1 17,824,736 98.1 one kill every two years in the PRCSSD/IMITATION CHEESE-ALL OTHR $41,485,632 14.6 8,095,961 6.0 9,783,300 12.6 United States. Kraft Foods $26,539,318 23.5 4,448,969 12.4 7,330,263 24.4 Private Label $3,778,541 (15.2) 1,258,004 (11.8) 1,073,617 (27.4) Yancey’s Fancy $2,687,605 33.7 450,077 31.8 213,819 31.8 Boar’s Head/Brunckhorst $1,594,481 27.1 261,397 26.3 130,698 26.3 27.6 Red Apple Marketing $1,308,595 (2.8) 258,041 (4.9) 127,100 (4.7) Increase in percentage of all Cabot Creamery $682,985 (8.6) 218,974 (9.8) 109,487 (9.8) other milk substitutes volume El Viajero Brands $463,277 (8.0) 122,667 (8.1) 92,001 (8.1) sold with merchandising support Crystal Farms $396,040 12.9 157,521 20.7 78,760 20.7 — from 6.4% a year ago to 34.0% Galaxy Nutritional Foods $385,906 3.0 91,138 3.4 43,557 2.0 during the most recent Hickory Farms $154,381 (42.2) 37,065 (42.3) 23,166 (42.3) 12 weeks — largest in the department. Most of the credit ALL OTHER SIDE DISHES $35,657,584 14.6 10,031,927 11.7 10,877,980 10.3 goes to WhiteWave Foods’ Bob Evans Farms $11,474,824 11.9 3,420,175 10.6 4,206,231 10.8 promotion of its new Silk Hormel Foods $6,558,612 0.8 1,958,150 2.9 2,543,886 3.1 Cashew Milk, already the top Private Label $5,591,202 19.9 1,858,449 19.8 1,579,182 9.9 seller by a mile. Reser’s Fine Foods $3,461,915 33.8 539,843 27.9 901,834 22.4 Giorgio Foods $1,075,518 209.1 265,240 209.1 135,341 (4.6) * Product has been in distribution less than one year.

16 www.frbuyer.com SEPTEMBER 2015 THE DATABANK

FASTEST PEPPERS/PIMENTOS/OLIVES $3,971,046 138.8 1,540,990 225.0 685,388 228.8 Private Label $3,021,776 559.1 1,357,031 460.7 580,819 731.7 DeLallo Packing Co. $403,238 (24.8) 84,922 (25.3) 40,993 (26.6) DELI Sinco $343,185 4.7 57,294 4.7 44,048 4.7 BY DELANO DELI Food Match $61,039 (64.4) 10,188 (68.5) 4,119 (66.2) World Variety Produce $52,104 106.8 12,346 135.1 2,610 76.3 During the 12 weeks ended MARINATED VEGETABLES/FRUIT $3,315,290 23.5 708,100 20.8 636,260 19.5 July 12, sales of deli foods in U-Jin Enterprises $1,318,356 79.6 266,239 82.1 232,959 82.1 supermarkets, drugstores, mass merchants, Winter Gardens Quality Foods $258,689 15.2 45,927 14.6 65,950 15.4 military commissaries and select club and World Variety Produce $238,663 25.2 43,566 27.0 37,339 24.9 dollar stores combined topped $6.14 billion, 3.6% more than the same period a year ago, Cedar’s Mediterranean Foods $171,335 (20.7) 51,218 (19.1) 25,609 (19.1) reports Chicago-based market research ﬁ rm Lucky Foods $155,428 35.4 32,703 38.4 28,615 38.4 IRI (@IRIworldwide). Unit sales rose 3.7% to Private Label $147,755 15.9 42,204 10.1 20,391 10.5 1.65 billion and volume grew 2.8% to 1.55 Ba Tampte Pickle Products $128,238 (2.0) 32,175 (6.4) 64,350 (6.4) billion. Volume sold with merchandising Joseph’s Fine Foods $104,379 14.9 28,224 10.3 24,680 10.3 support jumped 4.6 points to 42.0%. Sun Yun Trading Co. $103,491 2.8 25,613 (4.5) 22,412 (4.5) For the 52 weeks ended July 12, deli MEAT/CHEESE/CRACKER/DESSERT $368,430,144 12.7 188,743,552 14.4 63,780,976 6.4 dollars shot up 6.6% to $25.70 billion while Kraft Foods $273,415,456 9.9 142,570,464 16.9 50,210,148 5.4 units climbed 1.6% to 6.77 billion. Volume Armour-Eckrich Meats $39,767,936 (7.4) 35,871,784 (8.3) 7,107,291 (7.0) edged up 0.2% to 6.26 billion, and volume Hormel Foods $31,661,556 6.7 3,165,268 7.0 4,395,870 9.5 sold with merchandising support expanded Sargento Food Co. $11,985,042 * 3,616,278 * 1,017,259 * 1.0 point to 36.4%. Private Label $2,982,221 (5.4) 348,317 16.7 314,775 (22.2) Our chart shows the fastest-growing deli department subcategories, including Daniele $1,926,305 537.0 492,281 555.5 124,891 521.4 the leading manufacturers, for the 12 weeks Applegate Farms $1,488,358 7,017.3 347,724 7,866.2 114,704 7,886.6 ended July 12. Only subcategories with at Hillshire Brands $1,232,116 138.3 432,895 117.1 86,579 117.1 least $250,000 in sales during the period are Hickory Farms $359,315 37.5 22,526 32.7 30,973 34.3 listed. Manufacturers with less than $50,000 UNCOOKED MEATS (NO POULTRY) $1,082,495,232 12.0 144,510,048 4.7 243,297,472 1.8 in sales are not included. Private Label $542,895,744 16.9 75,155,536 11.0 130,962,224 4.1

Q Tyson Fresh Meats $138,549,008 73.9 15,641,974 56.7 31,520,460 71.6 Cargill Meat Solutions $122,107,136 (2.1) 14,704,722 (16.8) 26,727,200 (11.7) FACTOIDS Tyson Foods $51,978,512 (48.3) 9,154,591 (37.6) 10,999,852 (56.6) FPL Food $38,718,636 13.0 4,691,313 3.0 8,132,819 1.6 Hormel Foods $25,941,252 (21.1) 3,637,374 (18.4) 5,067,399 (14.1) Laura’s Lean Beef Co. $22,988,784 19.2 2,880,286 3.3 3,099,953 10.3 Interstate Meat $14,998,040 27.4 1,897,020 13.0 3,350,258 20.4 26.2 Smithfi eld $9,697,044 44.1 1,554,503 19.0 2,129,597 38.1 Percentage points separating National Beef Packing Co. $9,636,086 22.4 844,188 0.2 2,398,552 5.6 bacon dollar losses (-3.5%) PASTA/NOODLE $74,222,048 10.5 14,700,468 7.3 13,063,385 12.3 and volume gains (+22.7%), as Nestlé USA $40,689,652 2.1 8,163,557 1.6 7,083,204 4.4 commodity prices returned to more normal levels and Pastifi cio Rana $12,636,061 95.8 2,398,226 91.8 2,253,675 113.1 volume sold with merchan- Valley Fine Foods Co. $8,049,458 19.7 1,540,820 15.9 1,360,443 26.0 dising support shot up 15.4 Private Label $5,946,003 (9.9) 1,139,247 (21.2) 1,184,923 (5.5) percentage points from a Pulmuone Foods USA $2,903,817 (19.9) 440,102 (22.9) 453,964 (29.4) year ago to 57.8% — second- JSL Foods $525,492 10.9 273,975 9.1 125,851 8.9 highest in the department). Nuovo Pasta Productions $406,236 (4.9) 53,080 (9.9) 62,063 9.2 La Pasta $341,465 (3.0) 56,066 (11.0) 31,537 (11.0) Kasia’s Polish Deli $220,821 (16.9) 51,058 (32.5) 48,639 (27.0) Garan Enterprises $152,261 0.8 25,102 1.2 25,102 1.2 2.2 % DINNER SAUSAGE $895,369,472 4.9 227,939,920 5.5 252,100,896 5.1 Dollar gain by the deli’s Johnsonville Sausage $242,595,776 5.2 60,079,908 8.3 66,358,504 8.9 largest subcategory, sliced Hillshire Brands $128,576,000 (1.6) 33,451,138 (12.1) 31,072,030 (13.3) lunchmeat (to $1,320,528,128), Private Label $89,964,336 2.0 22,513,212 7.4 26,365,588 8.8 despite a 3.4% decrease in Armour-Eckrich Meats $67,048,068 22.8 22,081,962 30.5 22,471,678 27.4 units (and volume). The top Aidells Sausage Co. $21,724,082 14.8 3,819,554 15.6 2,864,666 15.6 fi ve brands all saw units fall, Bar-S Foods $21,621,648 21.9 4,970,151 33.4 9,812,492 15.2 but a 10.8% increase in dol- Premio Foods $21,233,124 (3.5) 4,289,772 12.8 5,715,725 4.2 lars by No. 3 Oscar Mayer Kayem Foods $13,511,701 1.5 2,980,411 2.0 2,294,820 2.1 Deli Fresh kept the segment in the black. Conecuh Sausage Co. $12,161,310 18.0 2,341,724 14.7 2,845,183 16.6 J&B Sausage Co. $10,402,740 7.8 2,847,070 15.4 3,858,953 13.5 PICKLES $55,667,336 3.3 15,265,831 (2.4) 25,652,496 (1.9) Kraft Foods $45,546,464 5.1 12,650,165 (0.5) 21,092,722 (0.1) * Product has been in distribution less than one year. SEPTEMBER 2015 www.frbuyer.com 17 UPFRONT

ents opting for “more items that can these categories who are interested save me time at home.” Following in exhibiting than ever before. One PL SEEN closely, were “more restaurant quality thing we have learned from past items” and “heart healthy items, such shows is that when companies want as low sodium.” to exhibit it usually means growth in GROWING —In the dairy department, a bet- the categories at retail.” ter assortment IN DAIRY & DELI topped shoppers’ desires, with 35% Consumer survey shows desire for of survey respond- fresh food options helping drive ents wanting to the trend. see more variety in general, and new nationwide study of 38% saying they buying behavior and con- would like greater Asumer preferences in deli, variety of cheeses dairy and fresh bakery departments in particular. shows that shoppers want more —When it came fresh food options and less work in to the bakery, the kitchen. shoppers had an Commissioned by the New York- eye on freshness based Private Label Manufacturers and health issues Association, the study was conducted foremost, with 31% by Surveylab, a specialist in online saying they would PLMA President Brian Sharo! and co-anchor Jodi market research. It covered attitudes like more items Daley reporting online from PLMA’s annual Private of 800 primary grocery shoppers. baked on-site Label Trade Show via PLMA’s year-round industry and 31% likewise HIGH FREQUENCY news and information service at www.plmalive. opting for prod- Q One big benefi ciary of the trend, ucts containing according to the results, would be “less fructose, sugar, corn syrup and Over the years, the importance store brands. More than half of bad fats.” With one in four shop- of the PLMA show has grown as respondents say that they buy more pers, more nutritional and freshness private label sales have outpaced the private label now than they did fi ve information, greater variety of por- national brands. According to the years ago, and 44% of the respond- tions, and more emphasis on healthy latest industry sales data compiled ents say that they currently buy store ingredients were also in demand. by Nielsen, private label accounts brands either always or frequently. Among improvements shoppers for one out of every fi ve dollars in Frequency of buy- would most like to supermarket sales and unit market ing is even higher see at the super- share exceeds 23%. Total private label in deli, dairy and market perimeter, sales in the United States last year bakery where it product sampling surpassed $115 billion. reached 47%. and demonstra- “Consumers are tions ranked high 2,700+ BOOTHS making it clear across all three In all, the show will present more they want conveni- departments. In than 2,700 exhibit booths, an ence and speed in the deli, faster increase of more than 400 booths meal preparation,” service and more in the past two years. Nearly 5,000 explained PLMA president Brian nutritional information about deli visitors are expected to attend, in- Sharoff , “and this is creating highly products were wanted improvements. cluding buyers and executives from profi table opportunities for retailers’ ! e study is part of PLMA’s plan the leading United States supermar- store brands to respond with their to spotlight store brands deli, dairy kets, drug chains, mass merchandis- own brands.” and bakery at this year’s Private Label ers, wholesale clubs, convenience In the PLMA study, shoppers for Trade Show, to be held Nov. 15-17 in and specialty retailers, in addition deli, dairy and bakery were asked Chicago. to wholesalers, brokers, importers “Which products would you like to “Deli, dairy and bakery are among and others. see more of?” the fastest-growing sections at the For more info regarding PLMA’s —In deli, convenience was the No. annual show,” said PLMA’s Sharoff . 2015 Private Label Trade Show, visit 1 demand, with four in 10 respond- “We are seeing more companies in www.plma.com. Q

18 www.frbuyer.com SEPTEMBER 2015 PLMA Ad Frozen.qxp_Layout 1 8/3/15 3:13 PM Page 1 Taste Success

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Bellamo: Currently, 81% of U.S. consumers purchase organic products. ! is is driven by the increased aware- ness from mainstream media, especially on health and GROWING environmental issues. Cultural shifts in consumers’ diets reﬂ ect an increase in wanting healthier options without pesticides and synthetic ingredients, with a governmental certiﬁ cation on the package. Due to these ORGANICS factors, we should see a constant desire for organic foods Information and advice you can use now. across the board.

What advice do you have for retailers to ere’s good information from Stamford, Conn.- merchandise/promote organic products based Daymon Worldwide on consumer pur- better? Hchase behavior related to organics, along Jorgensen: Retailers that have the space can capture core, with ideas you can use mid-level and peripheral organic consumers (basically to grow the segment. everyone!) by having both a dedicated organic section and We chatted with Carl integrated/segmented placement in every department. Jorgensen, Director, Organic purchasing starts in fresh, so the most power- Global Consumer ful signal Strategy – Wellness, ‘Three out of four American a retailer and Christine Bellamo, consumers are now purchasers can send to Global Director of Dairy of organic products. The larg- its custom- & Frozen. est group of new-entry organic ers about consumers is parents of young its organic How have organics children.’ — Jorgensen program is to have a robust grown during the Q past year or two? fresh and fresh prepared assortment that is clearly visible immedi- Jorgensen: Nationally we saw organic sales in 2014 up ately upon entering the store. Calling out the dedicated nearly 23% vs. 2012. In 2015, sales are expected to top organic section with hanging cards and banners visible $45 billion. from across the store, and creating clearly segmented Bellamo: Consumer demand has grown by double- in-line displays in the center store aisles will make it easy digits every year since the 1990s and organic sales for shoppers to make planned, new trial and impulse increased from $3.6 billion in 1997 to more than $39 purchases. billion in 2014. Some 51% of families are buying more ! ere are many motivations for buying organic, the organic products than a year ago, and more than 3,000 top ones being to avoid chemicals, to help preserve the farms are transitioning to organic across the country. environment by buying sustainably grown food, and to provide the best, safest food for the family. By telling the Any thoughts on purchase behavior stories of the products around these three motivations, of organic users? retailers can engage their organic shoppers in relevant Jorgensen: Organic is now mainstream. ! ree out of ways and build a wellness four American consumers are now purchasers of organic trust relationship. products. ! e largest group of new-entry organic con- Bellamo: Retailers should dis- sumers is parents of young children. Core organic con- cuss or demonstrate the rea- sumers have actually increased their organic spend. We son most people buy organic attribute this to the wider availability of organic through food, which is for what it does more channels and the increased assortment of organic not contain: toxins, pesticides, products in all categories. Farmers’ markets and discount fertilizers, antibiotics, growth and club channels are gaining ground as go-to sources of hormones and genetically modifi ed organisms (GMOs). organic products. While organic consumers continue to Parents and families want to do the right thing but may skew higher income and higher education, it is important be confused or swayed by mainstream media. Retailers to remember that consumers at every demographic level should take the time to educate consumers by answer- have the same aspirational and experiential motivations. ing their questions. Making organic food more enticing, ! is may be one of the reasons we are seeing successful easy to fi nd, and off ering specials or discounts will help organic programs at discount and club stores. encourage consumers to buy more organic products.

20 www.frbuyer.com SEPTEMBER 2015 Any advice to manufacturers on the years into the future, they are reluctant to expand pro- same topic? duction and plant more acres. Jorgensen: ! e main challenge for manufacturers right Bellamo: Manufacturers and retailers have a signifi cant now is securing organic supplies. ! e gap between opportunity to better understand and tap into the needs, organic production and organic demand is growing, and we are seeing shortages in key categories, such as dairy, ‘Organic food sales make up 4% of nuts and in vegetables for frozen. Organic vegetables are heading straight to the produce department, and manu- total food sales, while acreage de- facturers of frozen products are fi nding that they need to voted to organic agriculture is less off er long-term contracts to growers to secure than 1% of total U.S. cropland.’ supplies. Manufacturers using organic ingredients wants and motivations of the organic consumers — not need to reach upstream only to drive sales volume but also to continue to deliver innovative products. In the United States, we have insuffi cient availability ‘Retailers should discuss the of home-grown organic crops to meet reason most people buy organic consumer demand. Production is not food, which is for what it does keeping up with demand, and sup- not contain: toxins, pesticides, ply shortages are one of the greatest fertilizers, antibiotics, growth challenges facing the industry today. hormones and GMOs.’ — Bellamo Despite continued growth in production, manufacturers are not able to keep up with demand. Organic food sales in the supply chain and make long-term commitments make up 4% of total food sales, while acreage devoted to to dairies and growers. ! e organic business proposition organic agriculture is less than 1% of total U.S. cropland. Q involves substantial risk and investment for farmers, and ! ere is a huge opportunity for rural communities to fi ll unless they know who their customers will be several this demand. Q

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this will impact the frequency with which we shop for food as well as future demand for refrigerated and frozen foods. Smaller housing units will likely lead to an increase DO SWEAT in small shopping trips as consumers match shopping THE SMALL STUFF! behaviors with daily prod- Urbanization and tiny houses could have a major uct demand. With limited impact on our industry. How will you respond? storage capacity in many urban housing units on the BY TODD HALE East Coast, there is a reason why one-roll toilet tissue lot has been written about the urbanization sales have thrived. In large trend in countries around the globe. ! e number metro areas in countries like Aof people living in rural areas has been on the Japan, small food trips are decline for many years as populations shift to urban the norm as shoppers buy Todd Hale areas in support of jobs outside of agriculture. With just what they need for that urban areas come smaller living spaces. And while day’s meals. Other important McMansions still represent a sizeable portion of new questions to ask: Will smaller housing units with limited home construction in the United States today, urbaniza- space for perishable food storage translate into lower demand for frozen and refrigerated foods? Will the trend toward smaller homes have a negative impact on ownership of microwave versus conventional ovens? If consumers go without microwaves, will longer heating times for frozen and refrigerated foods prepared in conventional ovens hinder future sales?

COULD SMALL BE BIG? Q From a retail format perspective, many small formats can thrive better in urban locations than they might in suburban or rural locations, but small trips and small packages don’t mean that big formats can’t win, too. Urbanization enables both big and small stores to fl ourish in support of higher demand created by population density. Convenient shopping experiences and convenient Urbanization and an aging population will likely lead to meal preparation are themes that continue to reso- smaller living spaces — and fewer and smaller kitchen nate with many U.S. shoppers. Health and wellness appliances — in the decades ahead. advocates continue to stress that the amount we eat has as much or more to do with obesity levels as the tion and an aging population will likely lead to smaller lack of strenuous physical exercise. It would seem to me living spaces over the decades to come. that some innovative frozen and refrigerated manufactur- Check out all the ers will fi gure out how to combine these enduring trends Will smaller housing television shows and into a smaller package at a premium price. Or just maybe units with limited web sites featuring we will see collaboration with an appliance manufacturer tiny homes with less to create on-demand meals just like the Jetsons did in the space for perishable than 1,000 square feet futuristic ‘60s cartoon. Q —many in the 300- to food storage trans- 600-square-foot range. Retail insights thought leader Todd late into lower de- With tiny homes come Hale is the former tiny kitchens, often- senior vp of consumer mand for frozen and times sharing space and shopper insights with a home offi ce or at Nielsen and is prin- refrigerated foods? representing a major cipal at Cincinnati- portion of a home’s based Todd Hale LLC. main living space. With tiny kitchens come fewer and He can be reached at smaller kitchen appliances, and one has to wonder how [email protected].

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air space around their packages just your vendors to go with scrounds or looks prettier? Is there something whatever for the packages. Heck, tell TIME FOR about profi t that they don’t like? them to go with scrounds anyway — ! e one huge and obvious holdout it’s just common sense. is yogurt. Yogurt sec- But before I move on, tions are a country mile let me just ask: Do you MORE long in many stores, really need that new and all the containers yogurt item? Or do you ‘SCROUNDS’ are wide at the top and need to make some smart narrow at the bottom. decisions about what to BY JOHNNY HARRIS Some brands are even delete? You may have making tops even wider already cut back several ots of good things have been and bottoms even nar- other categories, includ- happening in dairy department rower. ! ere’s routinely ing milk (and almond/ Lpackaging, but there’s still room a half inch or three soy/coconut milk) to for improvement that will lead to quarters of an inch Johnny Harris make room for more better packout and stronger in-stock of air space between yogurt. Do you really positions. packages. I’m surprised some of them need everybody’s Greek yogurt in a First, hats off to Unilever for being don’t tip over. dozen fl avors? Do you need all those an innovator here, just as they were You don’t need a rocket scientist to kids’ yogurts? Hey, years ago, our with “scrounds” (square-round) con- tell you that you can get more SKUs parents would have told us to just eat tainers for Breyers ice cream 15 years on the shelf if you change the packag- the adult yogurt and shut up. Besides, ago. Looking back, it seems like a no- ing shapes. ! ink of all the extra spoilage and shrink has to be huge in brainer to adopt the same scround product duplication you could have! yogurt. I often see ridiculous mark- shape for rounds downs when expiration dates are of margarine, dips, around the corner. spreads and yogurt Of course yogurt is not the only Q and such. But for off ender when it comes to package whatever reason, shape. ! ere’s lots of air showing that didn’t happen. around those Philadelphia Cream At least not until Cheese bowls. And it’s not the only recently. off ender when it comes to being Walking through over-SKU’d. In my travels, I often see stores the other dairy creamer sections that look like day, I noticed how debris fi elds. How many brands, sizes Unilever has again and fl avors do you need? led the charge, changing packag- CASE-READY CHEESE ing on many dairy Let me end on a positive note. items from bowls Walmart has moved to a case-ready to rectangle shapes. shredded cheese program. It’s gotten Maybe they’re rid of all the pegboards, and the ef- not technically fi ciencies on rotation, ordering and scrounds, but I’ll stocking are huge. All you do is open let others quibble up the box and put it on the shelf. Of with that. You get course this shows the power you have the idea. ! e new with vendors if you’re a big boy like scrounds give bet- The scround (square-round) shapes popping up Walmart, but this is such a good idea ter packout and an in dairy provide better packout and an improved I expect to see it spreading. And un- improved billboard billboard. like the shift to scrounds, it shouldn’t for brands and take the industry 15 years. Q product varieties. (Yes, I’m being sarcastic.) So what’s holding back some of the Fact is, yogurt is over-SKU’d, and Johnny Harris, president of Johnny L. holdouts, in both private label and there’s no more room in the depart- Harris Consulting, LLC, Fort Mill, branded? Do they like risking higher ment. So if you really think you need S.C., can be reached at 803-984-2594 out-of-stocks? Do they think all that more variety in the category, tell or at [email protected].

24 www.frbuyer.com SEPTEMBER 2015

COVER STORY

uring the recession and slow recovery that followed, the only supermarket chains actually expanding were dollar stores and extreme value outlets. Now that the economyD is stronger, however, many conventional retailers are Ahead of looking to boost their numbers as well. We chose four of the fastest-growing to proﬁ le here — Sprouts, WinCo Foods, Smart & Final and Costco — which, between them, plan to add close

to 90 new stores this year alone. Q But a closer look reveals there’s nothing conventional about the Pack these retailers at all. In fact, says Don Stuart, managing partner In the race to expand into new markets — at Wilton, Conn.-based Cadent Consulting, “In many ways, or deeper into existing ones — Sprouts, they’re ‘anti-grocery’ stores” in that they’re all taking share WinCo Foods, Smart & Final and Costco from traditional supermarkets. And although they appear very diff erent at fi rst glance, in terms of size, assortment and target have moved into the lead. consumer, they actually have quite a bit in common, he continues. All have a fairly basic, simple approach to merchandising BY DENISE LEATHERS (three of the four are warehouses); all have limited selections and don’t carry some of the major CPG brands; all emphasize value in one way or another; and all are expanding their perishable off erings. “We’d place them all in the winner’s circle, but for totally diff erent reasons,” says Stuart. ! at’s because each occupies a distinctive niche in the marketplace where they’re leading the way, adds Jon Haupt- man, a partner at Barrington, Ill.-based Willard Bishop. “! ese retailers are not trying to be everything to everybody. Instead, they’re focusing on what they can do uniquely well,” from natural and organic fare for less to high quality club sizes at rock-bottom prices. But are these chains, perhaps, growing too fast and too wide? Responses are mixed. Yes, there have been a few missteps already, but Chesterfi eld, Mo.-based marketing and development consultant David Biernbaum thinks these retailers are smart to move while they’ve got momentum on their side. “! ere might be a time fi ve or seven years down the road where there are too many stores of their kind. But if and when that happens, adjust- ments and corrections will be made.” For now, though, he says, they appear to be giving consumers exactly what they want.

26 www.frbuyer.com SEPTEMBER 2015 ship shakeup, says the chain expects to expand at a rate of about 14% annually, with a long-term goal of 1,200 stores across the country. While the expansion appears to be going fairly well, the chain has experienced some growing pains. Stores in Austin and San Antonio, Texas, have closed, and those opening in markets where the chain already does business have cannibalized ‘Healthy Living sales from existing SPROUTS stores. In addition, No. of stores for Less’ pushback from 212 conventional super- Banners market competitors Sprouts Farmers Market oday’s aspirational shoppers want high quality has been stronger Markets natural, organic and local fare. But cash-strapped than expected lately, 13 states, primarily Southwest Millennials in particular can’t always afford to eat particularly in the and South Central U.S. Tthe way they’d like. Enter Phoenix-based Sprouts Farmers fresh produce and Annual sales Market, the poor man’s alternative to Whole Foods. With meat categories (fiscal year ending Dec. 28, 2014) good promotions (20% off all frozen foods one week last where Sprouts strives $2.97 billion month!) and solid pricing, particularly in fresh produce, to lead. “But Sprouts’ Net sales growth (vs. last year) 22% “I believe they can kick the crap out of Whole Foods… real Achilles heel is [among] folks who embrace that lifestyle but don’t have short-term fluctua- Employees 19,000 ‘Whole Paycheck’ incomes,” says one observer. tions in price,” says “Sprouts seems to have the magic formula,” agrees Jacobowitz, citing Jay Jacobowitz, president and founder of Brattleboro, price deflation in produce the past couple of quarters. Vt.-based Retail Insights. But competitors are working “But none of that takes away from the viability of Sprouts’ overtime to duplicate it. In fact, he says, Whole Foods’ model,” he adds. “‘Healthy living for less’ works.” new 365 format — smaller and lower-priced than its tra- Not everyone is so sure. “Sales per square foot are ditional stores — sounds an awful lot like Sprouts. Which nowhere near what they are in similar stores like Whole means the chain will have to continue to up its game if it Foods and Trader Joe’s,” says Waukesha, Wis.-based con- hopes to maintain its impressive growth rate, particularly sultant David Livingston, principal at DJL Research. “!at as the natural and organic sector becomes more crowded. makes Sprouts vulnerable if either of those two opens in a As of Aug. 6, Sprouts had 212 stores across 13 southern market where it opened first.” He adds, “At some point, I states, 22 of which opened their doors in 2015, including think they’re going to hit a wall.” !ough the company has no plans to scale back its expansion strategy, it was forced to lower full-year guidance recently (it went public in 2013). Still, expectations are high: comparable store sales growth of 4% to 5% and revenue growth in the 19% to 21% range. During the second quarter, which ended June 28, comp store sales climbed 5.1% while overall sales shot up 21% to $902.2 million. Sprouts stores average around 28,000 square feet — half the size of a conventional supermarket but significantly larger than a typi- Sprouts has opened 22 new stores already this year, including its "rst in Missouri, cal health food store. Despite the Alabama and Tennessee. But it hopes to open nearly 1,000 more over the next 15 years. farmer’s market vibe (natural light, merchandise in bins and barrels, its first in Missouri, Alabama and Tennessee. Five more low shelving, etc.), vitamins and supplements actually store openings are planned for the remainder of the year. take up more floor space than fresh produce. And that But outgoing president and CEO Doug Sanders, who will doesn’t leave a lot of room for everything else, including become executive chairman following a recent leader- frozen foods. But manufacturers say a thoughtfully cu-

SEPTEMBER 2015 www.frbuyer.com 27 COVER STORY

rated, focused assortment makes optimal use of limited “! ey’re really targeting that 5 o’ clock hour and try- freezer space. ing to become a drive-time destination,” adds Stuart. While adding freezer doors may not be at the top of “But it’s an interesting juxtaposition between a farmer’s Sprouts’ to-do list, the chain is updating the deli sections of sev- ‘I believe Sprouts can kick the crap out of Whole eral stores in order to expand fresh prepared food oﬀ erings, which are Foods…[among] folks who embrace that life- becoming a bigger part of its com- style but don’t have ‘Whole Paycheck’ incomes.’ petitive strategy. “Sprouts has done well with the lunch crowd,” says market and prepared meals. ! at’s a combination we Kaitlin Wolcott, senior business analyst at Cadent Con- haven’t seen elsewhere.” sulting. “Now they want to extend that into dinner.”

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“! ey’re working to reduce operating costs by elimi- nating the middle man and purchasing directly from local manufacturers and farmers,” says Cadent Con- sulting’s Wolcott. ! ough designed to wring costs from the system, “It actually gives them a nice local feel and makes them distinctive from Walmart and other competitors,” Low-Priced and Local adds Stuart. “So they really emphasize their ties to the region.” In addition, he says, the company is employee- oise, Idaho-based WinCo Foods calls itself “! e owned, which not only strengthens those ties but supermarket low price leader.” And according to creates a highly motivated workforce. (! e stock option industry watchers, it lives up to that title. In fact, program is legendary, making millionaires out of even Q B rank-and-fi le employees). Although stores are fairly basic — no pharmacy, fl orist or sushi bar — and many items (700+) are merchandised in bulk quantities, newer locations in particular are described as “clean” and “well-organized,” thanks to a new décor package. And, while self-service is the norm, most locations include full-service bakeries, delis and seafood departments. In addition,“WinCo’s perishables are outstanding, and they off er a wide variety of in-store prepared entrees and salads,” says one manufacturer. He adds, “It’s sort of like a Walmart that knows how With 102 stores in eight states (and counting), WinCo Foods is one of very few to merchandise fresh — or retailers that can claim ‘Walmart-low’ prices. Costco with just food.” As for assortment, “It doesn’t says Willard Bishop’s Hauptman, its insistence on fair carry everything, but it carries most of what consumers pricing means “WinCo’s grocery prices are every bit as want and need, if perhaps in a size they didn’t expect,” low as Walmart’s. And there aren’t too many retailers says one observer. that can make that claim.” However, adds another, “WinCo’s strict slotting policy One key is the company’s streamlined supply chain. may trip them up and cause them to miss out on some

28 www.frbuyer.com SEPTEMBER 2015

Q COVER STORY

hot new items from local and smaller manufacturers.” book page says it hopes Another small knock on the company is its under- to open “a couple more WINCO developed private label program — a bit surprising in a stores” this year. Win- No. of stores chain so committed to being the low-price leader in every Co also does business 102 market. But since it reached critical mass during the past in Idaho, Washington, Banners WinCo Foods couple of years, the California, Nevada, The company is company has contin- Oregon, Utah and Markets Washington, Idaho, employee-owned, ued to introduce new Arizona, where new California, Nevada, Oregon, items under its own stores recently opened Utah, Arizona and Texas which not only WinCo Foods label in Phoenix suburbs Annual sales rather than a dis- Chandler and Surprise. $6.1 billion strengthens ties to tributor’s. However, the company Employees the community but On the frozen side, announced late last 15,000 “WinCo appears to be year that it had pur- creates a highly mo- rolling out new stores chased a former Target with signifi cantly site in Oklahoma City, Okla., where it expects to expand tivated workforce. more frozen foods next. No opening date has been announced, but the chain space than it has in usually opens several locations at once in new markets. some of its older stores,” says Hauptman. “Clearly, it recog- Although the expansion into some markets has been a nizes that the returns on adding frozen food space remain bit bumpy — industry observers cite stumbles in Southern quite high even after many more frozen doors are added.” California and Utah — there’s no question WinCo is on Although WinCo is employee-owned, not public, an- the right track. “It’s a fast-growing regional that wouldn’t nual sales are estimated at around $6.1 billion, though have been in anyone’s ‘gold tier’ fi ve years ago,” says Stuart. that fi gure is expected to rise as the company continues “But it’s appearing there more and more frequently, not to expand. It opened its 102nd store in Garland, Texas, last because of its size but because of its distinctiveness and month — its sixth in the state — and the chain’s Face- the growth it’s been able to drive in its region.”

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! e company opened, relocated or converted 13 Smart Extra!-Ordinary & Final Extra! stores since the end of fi scal 2014 for a total of 111 (versus 99 legacy stores and 53 Cash & Carry stores). Sixteen more are slated for opening through the Growth at remainder of this year while 22 are planned for 2016 — all in existing markets. Although they still carry around 2,500 club-size packages — almost 50% more than most club stores, according to Godfrey — Extra! banners feature signifi cantly expanded perishables departments, including dairy, deli, escribed as a warehouse club store without the fresh meat and frozen foods. membership, Commerce, Calif.-based Smart In fact, says one consultant, Smart & Final is one of & Final holds a unique position only a handful of Dwithin the marketplace. But until the advent chains that are of the Extra! format in 2008, it wasn’t a place actually adding consumers could do all of their shopping. space for frozen Now, however, “they can shop for work and foods, making it home in the same place,” says group vp of unique among U.S. sales and merchandising Diana Godfrey, citing more than 5,000 additional items in Sales of Smart & Extra! stores. While the chain always off ered Final’s recently value, now it’s got the convenience piece revamped Sun covered as well, she adds. Harvest brand for Clearly, consumers are responding well. natural, organic Although earnings were fl at, net sales jumped and earth-friendly 10.1% to $3.5 billion during the fi scal year products are up ended Dec. 28. And comps were up 6.3%. 40%.

30 www.frbuyer.com SEPTEMBER 2015

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January, are up over 40% this year, reports president and CEO Dave Hirz in a second quarter conference call. And because it’s natural and organic, “Sun Harvest…is actually a much higher margin than even normal private label.” Hirz notes that while private label penetration at Smart & Final exceeds 29% (mostly from its ﬂ agship First Street label), store brands are under-represented in club ‘We are striving to allocate even more space to the frozen department.’

packs, which account for almost a third of all Smart & Final sales. “So growth going forward in club size will lean more towards private label.” One of only a handful of retailers adding more space for frozen While private label is “a source of tremen- foods, Smart & Final expects to open 16 more Extra! stores this year dous pride,” Godfrey says fi nding the right — and 22 in 2016. balance between national and store brands is key. “We know national brands are impor- retailers. Yes, it had to put in a certain number of frozen tant to our consumers, too.” doors to become the kind of one-stop shop consumers But the chain isn’t afraid to sell brands that aren’t fa- Q prefer, but the department has performed so well that it’s miliar or to rotate through brands in order to achieve the expected to expand even further. lowest possible cost, says one consultant. “It’s always a bit “Our [frozen] door-count target is larger than it was of a treasure hunt.” in the past, and we are striving to allocate even more space to the frozen department,” confi rms Matt Reeve, vp of grocery and frozen QQQQQQQQQQQQ SMART & FINAL foods. Frozen fruits and No. of stores vegetables, handheld 263 entrees and pizza have Banners done particularly well Smart & Final, Smart & and will likely get more Final Extra!, Cash & Carry space in the coming year, Markets he continues. But the California, Oregon, Washington, Arizona, big story is natural and Nevada and Idaho organic products, which Expands Overseas Annual sales have come on strong ssaquah, Wash.-based warehouse club store star (fi scal year ending Dec. 28) recently. Costco Wholesale reported net sales of $112.6 billion $3.5 billion “Natural and organic at the end of its fi scal year Aug. 31, 2014, a 7% increase Net sales growth has become more main- Icompared with the previous year. Total comps were up 4% (vs. last year) stream — our customers (a little more in the United States, a little less overseas). 10.1% are looking for it — and More recent results aren’t quite as impressive, thanks Employees we can provide a tre- to gasoline price defl ation and a strong U.S. dollar, but 7,900 mendous value com- the chain continues to expand, both here at home and pared to just about every abroad. As of July 30, it operated 680 warehouses world- retailer out there,” says Reeve. So customers can expect wide (480 in the U.S. and Puerto Rico), with plans for expanded frozen off erings in that segment as well, many several more by the end of the year. As suitable U.S. loca- under Smart & Final’s recently revamped Sun Harvest tions dwindle (there are no plans to enter new markets private label for natural, organic and “earth-friendly” here at home), the company has turned its attention products. Sales of the brand, which doubled in size since overseas. Ideally, say execs, it would like to open half of its

34 www.frbuyer.com SEPTEMBER 2015 new stores domestically and half abroad. away. !ose that don’t are replaced, creating the treasure !e company took a big step forward recently when hunt atmosphere Costco is known for. But the low SKU plans for its first French warehouse in a Paris suburb count also means buyers can react quickly to changes in were finally approved. Although Costco is likely to come the marketplace, says Retail Insights’ Jacobowitz. “!ey’re extremely Since most of the chain’s pro!ts come from membership fees, dynamic and follow margins are razor thin, creating some shockingly good bar- the trends. gains for customers willing to buy products in bulk quantities. Just look at how the mix has shifted up against some stiff competition (Carrefour, Auchan to natural and organic over the past couple of years,” he and Casino for starters), company execs foresee up to 15 remarks. It’s also moved into prepared foods in a big way, warehouses in France over the next decade, giving the tapping into yet another hot trend. chain a third European base (it’s already in the U.K. and Manufacturers also give the chain high marks for Spain). What makes it so confident? quality, noting that a 100% satisfaction guarantee allows For one thing, con- consumers to buy with confidence. And its Kirkland Sig- COSTCO sumers absolutely love Costco. In No. of stores 680 (as of July 30, 2015) fact, it’s ranked at the top of the Banners Costco American Cus- Markets tomer Satisfaction 43 U.S. states and Puerto Index survey for Rico and eight foreign club stores every countries year since 2001. It Annual sales comes as no sur- (fiscal year ending Aug. 31, prise, then, that the 2014): $112.6 billion chain’s membership Net sales growth renewal rate is a (vs. previous year) 7.0% whopping 91%, says Cadent’s Wolcott. Employees 189,000 (worldwide) !e big draw, of course, is the prices. Since most of the chain’s profits come from membership fees, margins are razor thin, creating some shockingly good bargains for customers willing to buy products in bulk quantities. (One manufacturer called bags of frozen seafood “a screaming hot deal.”) Fortunately for Costco, its older, more affluent consumer base, which fared better than the population as a whole post-recession, has the money to buy those sizes, says Cadent’s Stuart. However, some observers say the chain needs to do more to attract Millennials who didn’t grow up in a Costco household and may not grasp the benefits of buying in bulk. Costco hopes to open new warehouses at a rate of about 30 In addition, says Stuart, “Costco is a little cleaner, per year, half in the United States and half abroad. friendlier and more comfortable to shop than competitors. And its liberal use of sampling and demos makes shopping more of an experience than a chore.” nature private label is considered top-notch, though it’s Because the chain carries only around 4,000 SKUs, often used to fill in gaps in the assortment rather than as the assortment is very tight. Lower-volume categories an alternative to a national brand. are sometimes shut out altogether, forcing shoppers to go “I think Costco will be very successful going forward,” elsewhere to find all the items on their list. Products that concludes DJL Research’s Livingston. “No one in the club do make it onto the shelf are expected to perform — right store category can touch it.” Q

SEPTEMBER 2015 www.frbuyer.com 35 SPOTLIGHT: DINNERS/ENTREES

And, while Austin, Texas-based Michael Angelo’s Gour- met Foods (www.michaelangelos.com) has been making POISED FOR frozen entrees free of artifi cial fl avors and preservatives for more than 30 years, the company is communicating that message to consumers more and launching new prod- A COMEBACK ucts with even more better-for-you ingredients, says vp of retail sales Joe Keip. Although sales were down slightly, a slew of better-for- For example, Michael An- you, clean-label newcomers could breathe new life into gelo’s recently introduced the frozen entrees category. grass-fed beef Lasagna with BY CHRISTINE BLANK Meat Sauce in Sam’s Club stores. And this past spring hanks to continued gains in the handheld seg- the company released a ment — up 4.1% to $561.17 million during the 12 “Made with Organic” line Tweeks ended July 12 — total frozen dinner/entree that includes Lasagna with sales were down just 0.2% to $1.91 billion across chan- Meat Sauce, Vegetable La- nels, according to Chicago-based market research fi rm sagna, Eggplant Parmesan, IRI (@iriworldwide). Chicken Alfredo and several And though there’s other products. still work to be done ! is summer Solon, in the single- and Ohio-based Nestlé USA Michael Angelo’s features multi-serve meal transformed its fl agship Lean grass-fed beef and subcategories, the Cuisine lineup (www.lean antibiotic-free chicken in losses aren’t as bad cuisine.com), introducing 10 a pair of entrees sold at as in years past: new Lean Cuisine Market- Sam’s Club. multi-serve sales place entrees with an array of fell 1.8% to $415.86 specifi c health and lifestyle benefi ts. For example, its Sweet million while Sriracha Braised Beef and Pomegranate Chicken are high in single-serve sales protein and gluten-free. And its Marketplace Mushroom & were down 1.9% to Spring Pea Risotto and Cheese & Bean Enchilada Verde are ConAgra adds four new meals $932.50 million. made with organic ingredients and no GMOs. Some of the big- made with natural chicken and KEEPING IN STEP no arti" cial ingredients to its gest losses were Healthy Choice Simply Café posted by brands Also in step with the clean ingredients trend, Omaha, Steamers lineup. viewed as “diet” Neb.-based ConAgraFoods’ Healthy Choice Simply Café while those po- Steamers (www.healthychoice.com) are made with 100% sitioned as healthy, natural/organic or simple/real are natural chicken or meatballs and no artifi cial ingredi- growing quickly. ents, says David Koehler, associate brand manager for Healthy Choice. CLEAN LABELS SURGE Stamford, Conn.-based American Halal Co., maker of One of the biggest trends in the category is growing de- the Saff ron Road lineup (www.saff ronroadfood.com), has mand for products made with more natural, real ingre- been using ingredients such as chicken raised without dients or free of artifi cial ingredients. As a result, many antibiotics and growth hormones in its frozen entrees manufacturers are in the process of transforming their and chicken nuggets since the company fi rst launched its entire lines, while others are launching new products that products in 2010. “A clean deck of ingredients and a level build on the better-for-you items they already off er. of transparency is very important to the greenest genera- “Eating healthy” means something very diff erent today tion, also known as the ‘jaded’ generation, i.e. Millenni- than it did several years ago, when consumers demanded als,” says executive vp Jack Acree. “! ey are jaded because more low-fat, low-calorie options. “Healthy means better they want to do good, but have been sold so many false quality of life with better quality foods” says frozens mar- stories along the way.” keting manager Mark Gillilan of Denver-based Atkins As a result, all of Saff ron Road’s products, including Nutritionals (www.atkins.com). newcomers Vegetable Pad ! ai and Chicken Vindaloo, Jeff Gehres, senior director of sales and product de- feature certifi cations that verify label claims such as velopment at private label manufacturer Request Foods gluten-free, non-GMO ingredients and “humanely- (www.requestfoods.com), Holland, Mich., says his com- raised” chicken. pany is also seeing an increase in requests for frozen en- In addition to clean labels, Baby Boomers, Millenni- trees with “clean labels” as well as gluten-free selections. als and other demographic groups want meals that are

36 www.frbuyer.com SEPTEMBER 2015 All Natu ral Foods FASTEST GROWING FROZEN BRAND IN NATURAL CHANNEL Spins, 24 weeks ending 12/28/14, Frozen Entrées, Meat, Seafood, Poultry

Made from scratch in small batches using the ﬁnest organic and natural ingredients.

www.blakesallnatural.com /blakesallnaturalfoods @blakesnatural SPOTLIGHT: DINNERS/ENTREES

higher in protein and contain fewer carbs. “Consumers meatless options, says Matt Giese, associate brand man- are looking for meals packed full of protein so that they ager for Marie Callender’s. are left feeling fuller longer,” says Koehler. He adds that “While an estimated 100 million ‘fl exitarian’ consum- 34% of consumers are trying to cut back on carbs but ers are attempting to limit their meat intake, mainstream don’t want to compromise on other nutritionals. pot pie options lack meatless choices,” he explains. “Less Proof of consumers’ growing desire for low-carb meals than 1% of pot pie SKUs are meatless and none of the top is off ered by the success of Atkins frozen entrees, which 20 pot pie SKUs are meatless.” have generated $100 million in annual sales since the Younger shoppers in particular are also seeking more brand launched in 2012. To complement its frozen meals, ethnic fl avors, says American Halal’s Acree. “! ey are Atkins recently debuted a line of single-serve Stone eating world cuisine at food trucks and new quick-serve Fired Pizza with 11 grams of net carbs — a quarter of the restaurants and want the opportunity to conveniently eat amount in most frozen pizza, according to Gillilan. the same at home or work.” Even traditional pasta dishes are getting a carb makeo- “! e Millennial group has grown up being exposed to ver. For example, Michael Angelo’s is testing a protein- multi-ethnic cuisines,” agrees Debbie Curdy, director of only Chicken Piccata entrée to which consumers can add marketing for Tukwila, Wash.-based InnovAsian Cuisine their own pasta or starch alternative, says Keip. And four (www.innovasiancuisine.com). “! ey probably ate ! ai new additions to the Healthy Choice Simply Café Steam- food and sushi, for example, at a young age.” Not surpris- ers line—Grilled Chicken Pesto & Vegetables, Chicken ingly, she adds, InnovAsian’s Mai Pham Lemon Grass & Vegetable Stir Fry, Southwestern Style Chicken and Kitchen line, which features Southeast Asian fl avors, is Chicken & Broccoli Alfredo—feature fewer than 14 grams very popular among Millennials. ! e company is also of carbohydrates and more than 22 grams of protein. growing distribution of its Sriracha Chicken entrée. Q UNIQUE FLAVORS While consumers are FROZEN DINNERS/ENTREES seeking healthier fro- Sales in supermarkets, drugstores, mass merchants, military commissaries and select club and dollar zen meals, they also stores combined for the 12 weeks ended July 12, 2015, according to IRI (@iriworldwide), a Chicago- want more unique based market research fi rm. Percent change is versus the same period a year ago. Manufacturers with fl avors and variety. To less than $10 million in sales are not listed. that end, Atkins re- CATEGORY $ SALES % CHG UNIT SALES % CHG VOLUME % CHG cently launched Roast DINNERS/ENTREES $1,909,519,744 (0.2) 651,477,760 (4.5) 588,587,136 (2.9) Turkey with Garlic SNGL-SRV DINNERS/ENTREES $932,497,792 (1.9) 425,024,480 (4.7) 274,487,872 (4.3) Mashed Caulifl ower Nestlé USA $276,765,312 (1.6) 105,689,904 (3.8) 70,215,840 (4.4) and Beef Teriyaki Stir ConAgra Foods $259,148,688 (6.2) 143,951,424 (7.4) 92,707,944 (6.0) Fry. “Typically, people Bellisio Foods $86,897,208 6.9 65,317,376 (1.2) 36,684,212 1.4 Heinz North America $81,361,800 (13.7) 35,919,304 (13.8) 20,198,010 (13.5) living a low-carb Amy’s Kitchen $51,806,544 10.9 13,372,315 9.9 7,802,692 10.0 lifestyle tend to fall Pinnacle Foods Group $46,645,864 (1.0) 16,427,444 (6.4) 16,145,161 (6.2) into a rut and eat the Atkins Nutritionals $17,527,000 (2.2) 4,809,063 0.7 2,690,313 0.1 same thing over and Windsor Foods $17,457,550 (5.1) 7,292,653 (5.2) 6,053,723 (4.8) over. We have been Private Label $12,988,127 26.1 6,005,330 16.9 3,826,949 18.2 able to provide a lot of HNDLD ENTREES (NON-BRKFST) $561,165,248 4.1 161,467,264 (3.3) 176,161,408 2.5 variety for consumers Nestlé USA $182,224,624 (2.3) 52,984,476 (9.9) 50,955,640 (1.1) and foods they typi- Ruiz Foods $79,308,480 10.7 25,227,976 8.0 41,590,944 5.5 cally wouldn’t make Hillshire Brands $44,428,952 18.2 7,911,141 24.4 15,401,728 13.0 themselves,” says White Castle Foods $37,782,312 24.6 6,231,997 16.6 7,622,680 19.1 Gillilan. J.M. Smucker $37,713,920 21.8 7,722,184 23.2 7,469,479 22.7 In the frozen pot Foster Farms $24,317,650 0.4 4,066,941 2.0 10,615,248 (2.4) Private Label $19,343,340 (16.8) 7,799,765 (26.3) 5,718,697 (19.1) pie category, ConAgra AdvancePierre Foods $17,563,622 (1.0) 6,265,415 (8.3) 4,227,335 (7.2) Foods recently added Windsor Foods $16,979,020 12.2 11,427,238 12.8 5,639,805 8.3 some innovative Amy’s Kitchen $14,315,296 5.0 5,269,913 0.5 1,989,818 1.0 fl avors to its Marie MLT-SERVE DINNERS/ENTREES $415,856,704 (1.8) 64,985,984 (6.6) 137,937,824 (6.5) Callender’s lineup, in- Nestlé USA $163,154,144 (4.1) 20,398,976 (12.6) 56,638,144 (11.3) cluding Chili Pot Pie ConAgra Foods $91,242,800 1.3 15,967,162 (0.8) 25,525,336 (2.5) and Broccoli Cheddar Birds Eye Foods $64,138,152 14.6 13,144,519 9.1 22,726,980 14.9 & Potato Pot Pie, the Private Label $18,566,624 (15.8) 2,378,220 (24.0) 8,098,297 (12.3) latter of which caters Michael Angelo’s $15,576,638 3.1 1,567,076 (1.6) 3,834,540 (6.4) to those looking for On-Cor Frozen Foods $12,408,802 (11.7) 4,276,250 (12.8) 7,351,530 (12.8)

38 www.frbuyer.com SEPTEMBER 2015 YOU DESERVE ANOTHER 37%

Growth, that is. Actually, as our partner, you deserve 100% of the credit. We’re proud to have grown dollar sales by at least 37% over the past three consecutive years*. This makes Innovasian Cuisine the fastest growing Frozen Asian brand* and one of the fastest growing brands in all of Frozen Prepared Meals. Thank you. And together, here’s to many more.

50.2 41 50 37!.1 40 30 20 10 -4 0 -6 -1 -5 -1 0 -10 2012 2013 2014 52 Weeks thru 52 Weeks thru 52 Weeks thru 12/22/12 12/21/13 12/20/14

FROZEN ASIAN FROZEN PREPARED FOODS INNOVASIAN CUISINE

* SOURCE: CONTACT: Nielsen Scantrack Data, Total U.S. Dollar Sales – Joe Kent All Outlets Combined, 52 weeks ending 12/22/12, 18251B Cascade Avenue South 12/21/13, and 12/20/14 (vs. year ago) Tukwila, WA 98188 (425) 251-3706 "##$%&'"&#()"'"#*.($+ [email protected] SPOTLIGHT: BEVERAGES

shoppers. “We are seeing innovation strong growth in the dairy-based in the milk category like never be- smoothie and protein-drink seg- DRINK UP! fore,” says Julie Kadison, CEO of the ments, rolling out protein shakes Milk Processors Education Program made with organic milk earlier this The refrigerated juice segment (www.milkPEP.org), Wash- year. ! e two lines, registered a 1.0% gain, but milk ington, D.C. “From adding Organic Balance and sales are down. Protein-enhanced nutrition to re-strategizing Organic Fuel, are sold products and non-dairy alternatives branding and labeling, pro- in 11-ounce bottles could spark a turnaround. cessors are becoming more with a suggested retail nimble and shifting with price of $2.89 and BY CHRISTINE BLANK consumer needs.” $3.89, respectively. Consumers’ growing “Since Millennials ompared with the same affi nity for high-protein and other consumers period a year ago, sales of diets will continue to don’t always sit down Crefrigerated juices and drinks benefi t milk sales, Kadison for breakfast — and a climbed 1.0% to $1.37 billion during adds. “With 8 grams of carton of milk doesn’t the 12 weeks ended July 12, reports protein in every 8-ounce necessarily fi t into Chicago-based market research fi rm glass, milk is one of the people’s lives — we IRI. However, sales of frozen juices best ways to get protein,” need to fi gure out how continued to fall, dropping 6.1% to she explains. But many to deliver dairy-based $81.9 million as consumers opt for consumers are unaware alternatives in other more convenient beverages. of that fact. To that end, Cali" a Farms o! ers formats,” says Gold- ! anks to falling commodity MilkPEP is investing plant protein-based stein. prices and growing competition millions of dollars in a Almondmilk in Londonderry, N.H.- from non-dairy alternatives, the campaign to promote milk Chocolate and Vanilla. based Stonyfi eld (www. conventional milk segment is also as a “protein powerhouse.” stonyfi eld.com) also struggling. Skim milk dollar sales According to Kadison, “Tracking launched a cultured dairy smoothie tumbled 13.0% to $1.90 shows that our Milk called OP Organic Protein in choco- billion while whole Life advertising has late, strawberry and vanilla. And milk sales fell 4.5% to positively shifted Horizon Organic (www.horizondairy. $908.62 million (though campaign-specifi c com), Bloomfi eld, Colo., debuted a volume actually rose attitudes around line of organic milk and fruit puree 5.5%). However, sales of protein at breakfast, blends. Sold under the Super Squeeze fl avored milk/eggnog/ which gives us a lot brand, the 3.5-ounce pouches are buttermilk grew 7.7% to of hope for what is sold in four-count packages. $198.7 million. to come.” Also faring well: dairy Unlike conven- SMOOTHIES GO GREEK alternatives like almond tional milk, there Another innovative new product in milk (+6.4% to $214.15 is more demand the category comes from Glendale, million), coconut milk than supply for Calif.-based Nestlé USA (www. (+11.8% to $15.07 mil- organic milk, says nestleusa.com), whose Carnation lion) and milk substi- Lewis Goldstein, Breakfast Essentials Grab ‘N Go Pro- tutes-all other (+212.6% vp of marketing at tein Smoothies are off ered in Mixed to $18.44 million). ! e Organic Valley debuts LaFarge, Wis.-based Berry and Strawberry Banana fl avors. only loser among milk a pair of single-serve Organic Valley And this summer Dallas-based LALA substitutes was soymilk, protein shakes made (www.organicvalley. Foods (www.lalafoods.com) launched whose sales dropped with organic milk. coop). “We have had Low-Fat Greek Yogurt Smoothies in 6.0% to $67.2 million, to restrain ourselves Mango, Peach and Strawberry fl avors. as dairy-averse consumers shifted to from adding new customers because “…Our smoothies are one of the fi rst newer, better-tasting alternatives to we didn’t have enough milk.” Partly drinkable Greek dairy products avail- cow’s milk. as a result, sales of organic milk are able nationwide,” says brand manager not growing as fast as in past years. Kristen Williams. INNOVATIONS IN MILK But Organic Valley is seeing double- ! e market for refrigerated, alter- While dairy milk volume is fl at to digit growth in its organic half-and- native dairy beverages continues to down, the category continues to half and lactose-free milk, reports grow, with manufacturers rolling out welcome unique new products, many Goldstein. blends and solo versions of every- aimed at Millennials and on-the-go ! e company is also tapping into thing from soy and almond milk to

40 www.frbuyer.com SEPTEMBER 2015 15-10032 Refrig Frzn Bev_FUEL_PROD.pdf 1 8/20/15 4:08 PM SPOTLIGHT: BEVERAGES coconut and hemp milk. both Vanilla Protein and Chocolate Protein contain 6 “Some people don’t want dairy, grams of protein per 10.5-ounce bottle. and some people get bored. ! ey Califi a Farms also launched concentrated Cold want something new and diff erent,” Brew Coff ee, which allows consumers to create their says Goldstein, noting that sales of own café-style drinks at home. It also debuted Cold Organic Valley’s soy milk continue Brew Coff ee with Almondmilk Single Serves, Triple to grow. However, sales of soy milk Shot Cold Brew, Mocha Mexica Cold Brew and Dirty in general have declined recently Chai Cold Brew. “Consumers, especially Millennials, as almond milk becomes more are increasingly focusing on beverages that are not popular among shoppers at both only good for the planet, but that are also healthy, conventional grocery and natural low-calorie, GMO-free, gluten-free and soy-free,” food stores. “Millennials are having Steltenpohl says. a huge impact on the growth of non-dairy, plant-based beverages, NEW FROZEN MIXERS especially almond milks,” says Greg While frozen juice sales have declined in recent Steltenpohl, founder and CEO New blend-and-serve years, manufacturers hope to turn things around of Pasadena, Calif.-based Califi a frozen mixers from with new products and packaging. “Frozen juice Farms (www.califi afarms.com). Old Orchard come hasn’t kept pace with changing consumer trends In fact, a report by London-based in user-friendly and, as a result, has lost its appeal among the Mil- Mintel says 40% of Millennials microwaveable lennial shopper,” says Kevin Miller, vp of market- drink almond milk. plastic containers. ing for Spartan, Mich.-based Old Orchard Brands To meet increasing demand, Cal- (www.oldorchard.com). ifi a Farms “refreshed” its almond milk earlier this year, To make them more user-friendly, Old Orchard’s fro- says Steltenpohl. Now made with 100% plant proteins, zen juices and mixers are packed in microwaveable plastic containers, so shoppers no longer have to BEVERAGES wait for their juice to Sales in supermarkets, drugstores, mass merchants, military commissaries and select club and dollar thaw before recon- stores combined for the 12 weeks ended July 12, 2015, according to IRI (@iriworldwide), a Chicago- stituting. In addition, based market research fi rm. Percent change is versus the same period a year ago. Only subcategories the company recently with at least $10 million in sales during the period are listed. launched a line of CATEGORY $ SALES % CHG UNIT SALES % CHG VOLUME % CHG blend-and-serve fro- MILK $3,358,193,664 (8.0) 1,147,315,200 0.7 6,728,904,704 (0.4) zen mixers, including Skim/Lowfat Milk $1,902,627,072 (13.0) 652,285,184 (3.4) 4,125,816,320 (4.2) Margarita, Pina Co- Whole Milk $908,617,088 (4.5) 302,950,528 5.4 1,915,733,632 5. Almond Milk $214,145,472 6.4 64,968,540 6.7 268,394,016 6.8 lada and Strawberry Flavored Milk/Eggnog/Buttermilk $198,716,240 7.7 85,609,024 12.8 273,435,648 11.8 Daiquiri varieties. ! e Soy Milk $67,209,128 (6.0) 19,940,192 (4.5) 83,794,696 (5.6) 12-ounce plastic cans Kefi r $22,384,274 2.2 6,884,829 4.3 12,219,624 2.1 carry a $1.98 sug- Milk Substitutes-All Other $18,435,182 212.6 5,403,684 225.5 18,842,102 372.7 gested retail price. Coconut Milk $15,073,378 11.8 4,804,135 19.5 17,600,190 9.0 Miller says Old Milkshakes/Non-Dairy Drinks $10,985,838 (27.5) 4,468,972 (31.6) 13,068,149 (20.5) Orchard’s “trendy” RFG JUICES/DRINKS $1,365,793,664 1.0 474,265,920 (0.3) 27,872,833,536 (3.0) frozen lemonade Orange Juice $647,985,280 (2.6) 186,863,648 (4.3) 12,479,232,000 (5.3) fl avors such as Wa- Fruit Drink $239,449,728 4.4 119,137,600 0.3 7,695,979,008 (4.4) termelon Cucumber Lemonade $156,077,664 8.9 76,405,712 10.3 4,494,232,576 8.3 and Cherry Limeade Juice & Drink Smoothies $148,681,424 5.2 42,284,232 5.1 1,010,661,248 4.6 are appealing to Mil- Blended Fruit Juice $74,169,008 (9.7) 23,155,812 (10.5) 1,095,116,160 (15.1) Vegetable Juice/Cocktail $28,288,922 17.5 6,934,037 12.0 205,216,736 12.1 lennials, but moms All Other Fruit Juice $21,160,202 30.3 4,260,769 7.9 110,923,776 29.3 looking for healthier Grapefruit Juice $18,580,668 0.8 5,339,965 (2.2) 309,848,288 (1.0) options for their Apple Juice $10,180,546 (1.3) 3,339,919 (4.3) 154,680,256 (1.4) kids appreciate the RFG TEAS/COFFEE $270,769,024 16.2 113,520,800 13.1 8,396,038,144 7.5 reduced sugar. “Our Teas $219,566,464 14.8 100,406,688 12.7 7,796,210,688 7.6 lemonade is sweet- RTD Coffee $48,173,008 17.6 12,429,675 11.7 594,705,472 6.2 ened with a combina- FZ JUICES $81,909,952 (6.3) 47,083,096 (5.3) 136,323,920 (7.4) tion of real sugar and Orange Juice Concentrate $22,784,718 (6.1) 11,467,666 (8.3) 34,988,800 (8.3) Truvia, which reduces Drink/Cocktail Drink Concentrate $22,353,064 1.7 14,614,042 16.4 29,689,834 18.2 sugar 30% to 40%,” he Lemonade/Limeade Concentrate $16,554,452 (7.6) 10,847,796 (14.5) 42,274,120 (14.5) explains. Q

42 www.frbuyer.com SEPTEMBER 2015

SPOTLIGHT: SNACKS & APPETIZERS

lineups, Asian and Mexican snacks outperformed the category as a whole during the most recent 12 weeks, SNACKS JUMP 6.2% registering 12.3% and 9.8% gains, respectively, according All-day snacking — even at breakfast — is driving to IRI. “Consumers are seeking the more adventurous growth. But unique, ethnic and vegetarian options fl avors off ered by ethnic products,” she explains. could take the category even higher. Mediterranean fl avors are also gaining momentum. For example, South San Francisco-based ADF Foods BY DENISE LEATHERS recently debuted a line of vegetarian Mediterranean Bites under its Nate’s brand onsumers are opting for fresh over frozen in (www.natesmeatless.com). many categories, but snacks and appetizers is not Described as “falafels with Cone of them. During the 12 weeks ended July 12, a twist,” they come in four dollar sales shot up 6.2% to $380.96 million across chan- gluten-free fl avors, includ- nels, reports Chicago-based market research fi rm IRI. ing on-trend Kale. A simple lack of fresh alternatives to frozen snacks Another company with helps explain the category’s recent success, but it’s also Mediterranean roots, being driven by consumers’ growing penchant for snack- Cleveland-based Athens ing in general. In fact, recent Nielsen research indicates Foods (www.athensfoods. that more than 90% of Americans snack daily and 25% com) is also jumping on snack three to fi ve times a day. the kale trend, adding Rather than sitting down for a meal three times a day, Cheesy Kale & Artichoke “A lot of consumers just eat when they can,” says Meade and Quattro Formaggio Bradshaw, national sales manager at Moonachie, N.J.- Bylada Foods introduces to its line of mini fi lled based Bylada Foods (www.byladafoods.com). But busy Popolies, crispy mini fi llo shells. It also plans to schedules aren’t the only reason they opt for snacks over popovers " lled with on- “freshen up” its Blossoms meals, he adds, citing a trend ingredients. product line with the addi- broader shift in how con- tion of some new fl avors in Q sumers eat. “! ink about 2016, says company president Scott Sumser. Although the how common it is for a category is doing well right now, “Base products will only group to sit down at a res- drive growth for so long before the consumer gets bored. taurant and order a bunch Diff erentiating the mix will be essential to keeping shop- of appetizers to share pers coming back to the section,” he says. versus a single entrée for everyone,” he remarks. MORE MEATLESS OFFERINGS “! at’s how consumers One possibility: more meatless off erings. “Consumers want to eat at home, too” looking to cut back on meat consumption want more than — especially Millennials. just veggie burgers,” says Rick Bauman, senior vp of sales Bylada recently rolled at Vancouver, British Columbia-based Gardein (www. out a line of mini fi lled gardein.com). ! ey want options in every category, includ- Nestle’s new Hot Pockets popovers (“Popolies”) in ing frozen snacks. Plant-based alternatives to seafood and Bites come in four four fl avors: Blue Cheese pork have been particularly scarce, he continues, prompt- traditional # avors and & Bacon, Salsa Verde & ing the company’s recent introduction of Mini Crispy three breakfast varieties. Chorizo, Pepperoni Pizza Crabless Cakes and Sweet & Sour Porkless Bites. and Buff alo Chicken. But But at the other end of the spectrum, protein-rich the real key is the carrier, says Bradshaw. Not only is it meat-based appetizers are also enjoying a surge in popu- diff erent, “It’s lower in fat and calories than most other larity. “Consumers know that protein makes them feel frozen snack carriers — and surprisingly light.” full longer, so they are reaching for more high-protein foods, especially for snacking occasions and in the morn- ETHNIC FLAVORS LEAD ing,” says Rachel Cullen, president and CEO at Dinuba, While up-and-coming fl avors like Buff alo Chicken and Calif.-based Ruiz Foods, maker of the El Monterey lineup Pork Barbecue are fi nding homes in many frozen snack (www.elmonterey.com). collections, manufacturers say Asian and Hispanic fl avor ! e company’s newest frozen snack is actually intended profi les remain the most popular (though Indian is for morning noshing — if not fi rst thing, then during the making inroads). In fact, notes Beth Conner, marketing “second breakfast” many Americans eat mid-morning. director at Houston-based Ajinomoto Windsor (www. Available in both Maple Flavored Egg & Sausage and Egg windsorfoods.com), maker of the Tai Pei and José Olé & Cheese fl avors, El Monterey Breakfast Roll-Ups are just

44 www.frbuyer.com SEPTEMBER 2015 2.5 ounces each, giving consumers with smaller FROZEN SNACKS & APPETIZERS appetites or in need Sales in supermarkets, drugstores, mass merchants, military commissaries and select club and dollar of portion control an stores combined for the 12 weeks ended July 12, 2015, according to IRI (@iriworldwide), a Chicago- alternative to breakfast based market research fi rm. Percent change is versus the same period a year ago. burritos. CATEGORY $ SALES % CHG UNIT SALES % CHG VOLUME % CHG ! e folks at Solon, APPETIZERS/SNACK ROLLS $380,961,216 6.2 86,597,064 2.9 111,107,160 5.2 Ohio-based Nestlé General Mills $118,128,048 6.1 27,454,386 (4.6) 44,895,592 5.7 USA had the same Delimex $31,129,154 17.7 4,726,545 17.3 8,799,446 18.4 thing in mind when Ore-Ida Foods $30,999,364 9.5 7,827,902 10.5 6,997,495 6.4 they developed Hot Windsor Foods $29,811,808 3.4 5,918,576 2.1 8,299,637 3.9 Pockets Breakfast Bites Rich Products Corp. $25,526,244 0.2 3,616,796 (6.2) 7,068,134 (4.0) (www.hotpockets.com), Private Label $22,629,476 13.2 5,638,891 6.8 5,796,263 12.2 “a bite-sized snack Heinz $16,798,316 (12.4) 2,824,577 (16.1) 3,221,100 (13.3) version of [traditional] Schwan’s $14,152,850 7.1 3,706,177 13.3 3,602,905 (3.1) Hot Pockets,” says marketing manager Chris- Ruiz Foods $12,563,530 (14.1) 1,816,220 (13.3) 3,263,370 (21.2) topher Brody. Available ConAgra $7,638,221 20.5 1,754,962 49.5 1,285,807 6.2 fl avors include Bacon, Ham and Sausage, all with eggs and low-fat cheese. ! e company also right away because it works so well in this category,” he rolled out four non-breakfast Bites varieties. explains. “But that’s only for pizza rolls and other prod- Although Nestlé says suggested retail price is $5 for ucts that have been around a while. For new items, you two 9-ounce packages,Bylada’s Bradshaw thinks retailers don’t want to force shoppers to buy two or three or four should hold off on multiple price points for new snacks of something they’ve never tried before. After the con- until consumers are comfortable with them. “A lot of sumer’s bought it three or four times, then switch to a Q category managers want to go to multiple price points multiple price point.” Q SPOTLIGHT: PIZZA

lion on a 3.1% decline in units. But more enjoyable than a pepperoni volume shot up 16.1%, indicating that pizza — especially one made with consumers are trading up to larger high-quality, nitrite-/nitrate-free packages. pepperoni.” PIZZA Refrigerated pizza/pizza kits dol- Better4U’s new Gluten Free lars edged up 0.6% to $75.37 million Sprouted Ancient Grains Pizzas are while units and volume declined MOVES 2.1% and 1.1%, respectively. However, category leader private label saw its UPSCALE dollar sales grow 2.2% to $61.18 million while unit sales jumped 3.1%. Millennials are helping retailers pull Similar to its frozen counterpart, more dollars from fewer units. refrigerated pizza crust dough sales increased 1.5% in dollars (to $16.91 BY DAN RAFTERY million) and 0.5% in units on a small decline in volume. rozen pizza dollar sales increased 3.9% to $990.81 mil- ‘ENLIGHTENED CONSUMERS’ Flion across channels on a 4.9% “! e main drivers of current pizza decline in units during the 12 weeks sales trends are…the demands of a ending July 12 (versus the same more nutritionally enlightened con- Better 4U Foods debuts Gluten- period a year earlier), according to sumer,” says Amy Lotker, owner and Free Sprouted Ancient Grain Pizza executive vp of marketing and sales in three # avors. at Delray Beach, Fla.-based Better 4U Foods (www.better4ufoods.com). “the fi rst and only” gluten-free frozen “! is enlightened consumer seeks pizzas made with sprouted ancient products made with wholesome, grains, adds Lotker. “! ey contain non-GMO ingredients that conform four naturally gluten-free sprouted to specifi c dietary needs and/or pref- ancient grains — brown rice, quinoa, erences, including gluten-free, veg- millet and chia — and non-GMO etarian, whole grains, and a healthy ingredients.” Better4U currently balance of fat, cholesterol, sodium makes three varieties: Four Cheese, and calories. Enlightened consumers Mediterranean and Pepperoni. want all this and convenient meal “People are gravitating to artisa- preparation, too, because they are nal ingredients for pizza similar to busy people. the way they are in the micro-beer For smaller, adult households, “Our pizzas segment,” Schwan’s introduces the upscale with Mediter- says Sameer Bon Appetit collection. ranean top- Shah, vp of pings (roasted marketing IRI (@IRIworldwide), the Chicago- red peppers, at Austin, based market research fi rm. In fact, artichokes, Texas-based seven of the top 10 manufacturers roasted onions, Smart registered dollar sales gains — four Kalamata olives, Flour Foods by 10% or more — while nine of spinach and (www.smart 10 saw dollars outpace units, sug- Feta) are espe- fl o u r f o o d s . gesting that consumers in every cially popular, as com), which Described as a cross between stromboli segment are trading up to more pre- are our Roasted also off ers and pizza, Boboli’s new Patissa Twisted mium varieties. Vegetable and all-natural, & Stu! ed Flatbreads are unlike anything However, several suppliers saw Uncured Pep- gluten-free else in the category. units expand as well — three by dou- peroni Pizzas,” pizza with ble digits (Bernatello’s, Palermo and she continues. crusts made Home Run Inn) — and No. 3 private “We attribute the former to the with ancient grains (though its aren’t label was up 4.6%. growing number of vegetarian- sprouted). Dollar sales of frozen pizza crusts/ oriented consumers and the latter to “Ancient grains lead to a better dough jumped 15.8% to $5.18 mil- meat lovers since there are few things taste and texture and off er a higher

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level of nutrition — from Boboli International (www.boboli-intl.com), calcium, fi ber and protein,” Stockton, Calif. “People do not want to sacri- says Shah. “And they confi ce taste and quality for convenience.” tain no preservatives, no And adventurous Millennials, in particular, antibodies or hormones.” don’t want the same-old, same-old either, he Plus, the crusts are cur- adds. After years of testing diff erent product rently being certifi ed by the iterations with consumers, Boboli came up Non-GMO Project. Smart with a new item it says is unlike any other Flour recently added three in the frozen pizza category. “Our new Pa- new varieties to the lineup: tissa Twisted & Stuff ed Flatbreads are hand- Chicken Sausage (“all the stretched and fi lled with herbs, sauces, cheeses fl avor of pork but lower in and local ingredients, creating a unique fl avor fat”), Tuscan-inspired Two Smart Flour Foods adds three new experience,” says Helland, who calls them Meat (with pepperoncini and # avors to its line of gluten-free a cross between stromboli and pizza. “! ey uncured meats) and Sun- pizza made with ancient grains. feature a traditional, high-quality fl atbread Dried Tomato and Escarole. (Continued on page 52) Better-for-you, upscale and ethnic, they off er many of the attributes Millennials THE NEW PIZZA CONSUMER in particular are looking for, says Shah. “More than other age groups, Millen- A new study from Austin, Texas-based Smart Flour Foods (www. nials are key to growth in the pizza cat- smartfl ourfoods.com) in conjunction with ! e Center for Gen- egory,” and they’re likely to become even erational Kinetics, paints a new picture of pizza lovers in America: more important in the future, he adds. young, health-conscious and more likely to be female. Based on a survey of 3,288 U.S. consumers, the study found that PREMIUM TOPPINGS IN DEMAND 2,906 — close to 90% — live in a household that eats pizza at least Premium toppings are also gaining in once a month. About a third of those go to restaurants for pizza and popularity. “We are seeing a strong inter- buy frozen pizza, making them “pizza lovers,” according to research- est in premium meat toppings,” says Brad ers. A closer look at those heavy users revealed: Sterl, CEO and president at American t 63% of pizza lovers in the U.S. are women. Flatbread (www.americanfl atbreadprod t 53% of pizza lovers are ages 25 to 44. ucts.com), Pittsfi eld, N.H., whose pre- t 68% of all pizza lovers exercise two or more times per week. mium quality lineup is hand-made with t 72% of pizza lovers and 77% of Millennials in general think it’s all-natural ingredients and cooked in a completely acceptable to eat pizza for breakfast and dinner on the wood-fi red oven. “Spicy is another trend same day. that we are seeing,” he adds. “We have retailers asking about things like jalapenos t 73% of pizza lovers say that pizza and movies are the perfect date and hot sauces on their pizzas.” night. Eighty percent of Millennials think that. American Flatbread plans to launch t 31% of pizza lovers say gluten-free is important when selecting a several new meat varieties in late 2015, frozen pizza. including Pepperoni and Bacon; Pulled t 65% of pizza lovers who buy gluten-free pizza do not buy it be- Pork with BBQ Sauce and Pineap- cause of a gluten allergy. ple; and Pulled Pork with BBQ Sauce, t Attributes like gluten-free, reduced calories, low fat, organic and Pineapple and Fresh Jalapeno Slices. ! e non-dairy are all far more important to Millennials than to other company also plans to launch several generations. additional fl avors in early 2016, reports t 77% of pizza lovers say that natural ingredients are important to Sterl, citing continued demand for pre- them when selecting a frozen pizza. mium quality, clean label and better-for- t 60% of pizza lovers try to avoid pizza with unhealthy ingredients. you options. While quality and nutrition are key, t 86% of pizza lovers have recommended their favorite pizza to their they’re only part of the equation. Pizza friends and family. still has to taste good, and it’s got to be t Millennials tend to use the Internet and social media much more easy. “With people in a hurry and eating heavily than older generations when it comes to receiving pizza on the go, great-tasting single-serve and information. easy-to-eat items made with high-qual- Source: “Pizza Lovers in America 2015: Unexpected Findings from a ity ingredients are trending,” explains Generational Look at Pizza Trends,” June 2015, for more information, Josh Helland, president and COO at go to www.smartfl ourfoods.com/press-events/.

48 www.frbuyer.com SEPTEMBER 2015

SPOTLIGHT: PIZZA

CASUAL AND CUSTOMIZABLE: FAST FACTS THE RISE OF BYO PIZZA CONCEPTS The number of fast-casual pizza BY ADRIENNE NADEAU restaurants grew 27% in 2014. As new players enter the segment, expect ore than half of respondents to a recent Technomic survey say several more years of rapid growth for customization is highly important in creating good value, which the format. helps explain why build-your-own (BYO) concepts have enjoyed Q Msuch success over the past few years. While pizza has always included a BYO element (who hasn’t argued for his favorite topping?), chains like Among the Top 500 chain restaurants, Pizza Rev and Pie Five have capitalized on the trend to create truly person- the four largest restaurant pizza brands alized experiences around one of Italy’s most famous culinary creations. — Pizza Hut, Domino’s, Little Caesars It’s easy to see why these fast casual pizza concepts are so appealing to and Papa John’s — still own 70% of the investors and franchisees: last year, these $21.9 billion in pizza-chain market. new concepts, led by fast-growing chains Q like Blaze Pizza, had the largest annual 75% of consumers eat pizza twice a sales gain (22%) of all fast casual restau- month or more often, and consumers rant types. Rapidly growing store counts report an average of 3.4 pizza occasions are helping these restaurants steal market per month. share at both lunch and dinner. Many casual dining concepts are expanding into the customizable pizza space as well, leverag- found in the frozen and refrigerated ing their restaurant expertise in the new BYO aisles. Consumers have always looked for format. Buff alo Wild Wings’ stake in Pizza Adrienne Nadeau a diversity of toppings on store-bought Rev has been heavily reported (and the chain pizza; BYO chains will likely increase profi ted from all the media coverage). And that demand. ! e high quality ingredi- Smashburger founder Tom Ryan recently launched BYO Pizza restaurant ents found in these restaurants’ prod- Live Basil. Even existing pizza restaurants are getting in on the action, creat- ucts will also raise expectations around ing niche restaurants that speak to younger consumers. For example, Pie topping taste and attributes. Consum- Five is owned by Pizza Inn, while Cucinova, which markets fast, customiz- ers could also become even more price able pizza pies (among other Italian fare), is a Sbarro spin-off . sensitive. If they get used to paying a fl at Build-your-own concepts are appealing to customers for several reasons. fee for limitless toppings, they might Most obviously, the customer maintains control over taste and fl avor, and have similar expectations for grocery consumers are increasingly interested in creating their own fl avor profi les store pizza. Finally, BYO pizzas off er the rather than ordering a ready-made meal. As a result, a multitude of delicious ability to create a meal that is enjoy- ingredients is essential to meet the taste preferences of many customers. able, regardless of dietary restriction. As Although pizza has historically been a shareable entrée, these fast casual interest in vegan/veg- concepts special- etarian and gluten-free ize in smaller pies, products continues to typically 10 to 12 grow, ready-made pizzas inches, so that each may want to expand of- individual can cre- ferings to capture these ate his own person- dietary trends. Ready- alized pie. Price is made pizzas will always also a decision-driv- be a freezer staple, but er and, as a result, fast-bake products with there is often a fl at on-trend ingredients that price point, with address dietary restric- no extra charge for tions may soon become additional toppings. the new normal. Q However, several locations off er gluten- Adrienne Nadeau is free pie crusts for a a consultant with small upcharge. Technomic, Inc. (www. ! ese off erings technomic.com), the will likely impact Chicago-based consult- prepared pizzas ing and research fi rm serving the food industry.

50 www.frbuyer.com SEPTEMBER 2015

SPOTLIGHT: PIZZA

(Continued from page 48) dough shaped into a bowl with twisted ends. After bak- Celiac Support Association-certifi ed Freschetta lineup ing, the ends are crunchy and fi lled with pizza ingredi- (www.freschetta.com) with a pair of single-serve SKUs. ents while the center is open in a more traditional pizza “! e Four-Cheese Medley has a unique, 100% real, pre- fashion.” mium blend of cheese toppings, He adds that the pizza category already including mozzarella, fontina, has many single-serve and family-size pizza parmesan and Asiago, and the options. So Boboli fl atbreads are off ered in Signature Pepperoni features single-serve two-packs that fall between loads of pepperoni,” says Mc- those extremes. Adams. “! e new crust creates a pizza the entire family can en- SAVVY PIZZA LOVERS joy, regardless of whether they “As information and the ability to connect are sensitive to gluten or not.” with anyone becomes faster and more acces- “! e specialty pizza seg- sible, consumers get savvier and set higher ment continues to grow in expectations for what they consume (qual- the category,” he adds. “We ity) and what they know about it (transpar- explored shoppers who make ency),” observes Kevin McAdams, presi- purchases in this segment and dent of Schwan’s Consumer Brands (www. To meet growing demand for identifi ed a key insight around theschwanfoodcompany.com), Marshall, more premium meat toppings a unique consumer group we Minn. “And, as Millennials become the and spicy # avors, American call Everyday Gourmets. ! ese most prominent generation, high-quality, Flatbread will roll out three consumers have smaller house- convenient foods with transparent ingredi- new # avors later this year. holds, appreciate fi ne food and ents are becoming the norm.” struggle to fi nd a frozen pizza McAdams also believes that gluten-free is one of the that meets their needs,” McAdams explains. “! ey want biggest trends now. “! e gluten-free category grew by a pizza made for adults, meaning a higher-quality pizza 15% in 2014 and is projected to grow just as fast in 2015 with distinctive ingredients like pesto, spinach, garlic, and 2016.” Schwan’s recently expanded its gluten-free, roasted veggies.”

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52 www.frbuyer.com SEPTEMBER 2015 From these insights, Schwan’s PIZZA launched Bon Appétit (www. Sales in supermarkets, drugstores, mass market retailers, military commissaries and select club and dollar stores combined for the 12 weeks ended July 12, 2015, according to IRI (@iriworldwide), bonappetitpizza. a Chicago-based market research fi rm. Percent change is versus the same period a year ago. Only com), a new, “more manufacturers with at least $1 million in sales during the period are listed. refi ned” pizza collection featuring CATEGORY $ SALES % CHG UNIT SALES % CHG VOLUME % CHG unique, adult- FZ PIZZA $996,332,672 3.6 287,761,792 (5.0) 302,925,792 (1.3) oriented fl avor FZ PIZZA $990,805,056 3.9 286,238,752 (4.9) 300,891,392 (1.1) profi les. Available Nestlé USA $423,488,608 2.0 94,183,344 (2.7) 117,458,696 (1.6) since February, the Schwan’s $197,360,528 0.3 51,150,080 (5.1) 64,209,092 (2.6) thin-crust, artisan- Private Label $109,381,344 10.0 34,042,600 4.6 37,840,652 6.8 style pizzas are General Mills $89,333,488 (6.0) 60,998,644 (16.3) 43,191,672 (12.7) just 10 inches in Palermo Villa $25,643,046 93.5 4,509,148 48.6 5,554,841 78.9 diameter, mak- Bernatello’s $20,521,224 31.2 4,924,387 16.0 5,384,623 26.0 ing them a better Home Run Inn $15,280,708 23.1 2,636,776 17.5 3,779,458 27.2 fi t for smaller, Newman’s Own $13,032,913 5.9 2,262,173 7.5 1,917,318 6.3 Everyday Gourmet Pinnacle Foods Group $12,861,378 (7.0) 11,961,654 (13.3) 4,005,882 (12.7) households. Amy’s Kitchen $12,738,862 (5.3) 1,967,953 (11.1) 1,466,579 (9.8) In addition, “! e FZ PIZZA CRUSTS/DOUGH $5,181,808 15.8 1,462,143 (3.1) 1,938,924 16.1 smaller size allows Private Label $1,448,534 12.6 459,997 (2.3) 556,811 (7.5) us to use high- Boulder Brands $1,258,302 9.1 236,066 1.7 118,033 1.7 quality, fl avorful RFG PIZZA $92,281,120 0.8 18,442,540 (1.1) 30,328,212 (0.9) ingredients while still delivering a

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better4ufoods.com a great value,” says McAdams. Available varieties include Mozzarella & Pesto, Spinaci, Trio Bacon, Pepperoni & Pesto and Roasted Vegetable. “We are also seeing a brick oven-baked crust trend in restaurant pizza,” says McAdams. “To tap into this trend, we launched Red Baron Brick Oven Pizza (www.redbaron.com), featuring a unique crispy, bubbly texture and a golden brown crust, in Febru- ary.” ! e new line comes in four varieties: Pepperoni, Cheese Trio, Meat Trio and Sausage Supreme. Q Dan Raftery is president of Raftery Resource Network and a trumpet hobbyist. He can be reached at Dan@ RafteryNet.com. FIRE UP THE GRILL! hile 93% of all frozen pizza is cooked in Wa conventional oven, non-traditional preparation methods are gaining steam — and expanding the number of occasions at which pizza can be served. For example, “In the summer, a lot of people like to grill their pizza,” says Brad Sterl, CEO and president at Pitts! eld, N.H.- based American Flatbread (www.american" at breadproducts.com). “We probably get 10-plus calls per week from people asking about it.” Grilling is especially popular among tail- gaters at sporting events, but Josh Helland, president and COO at Stockton, Calif.-based Boboli International (www.boboli-intl.com) says pizza on the barbie is popular at summer picnics, pool parties and campouts as well. He’s also seeing an upswing in the use of pizza stones. “I use one myself when I make pizza at home,” he says. But not everyone knows how to use them properly. “A lot of people don’t understand that they need to preheat the stone before baking the pizza,” says Sterl. Retailers could help in this regard by including pizza stone basics as well as grilling instructions on their websites or in in-store magazines. So how exactly do you grill a pizza? “Our pizza, like many others, should be placed directly on the grill (even in the oven) as opposed to on a pan or foil or a pizza stone,” answers Amy Lotker, owner and executive vp of marketing and sales at Delray Beach, Fla.-based Better 4U Foods (www.better4ufoods.com). “This is the surest way to produce a crispy crust, which we consider a pizza must.” Q SPOTLIGHT: DESSERTS

of the best performances among the addition, she adds, they’re handheld, top 10 frozen pie brands was reg- which makes them easy to eat on FROZEN istered by Edwards Singles (+14.3% the run — a prerequisite for many of to $9.34 million) from Blooming- today’s busy families. ton, Minn.-based Schwan’s (www. Even when desserts are part of CHEESECAKE edwardsdesserts.com). the menu, minis allow consumers Chicago-based Sara Lee (www. saraleedesserts.com), now part of UP 3.4% Tyson Foods, also does a brisk busi- The rest of the category struggled, ness in single-serve frozen desserts, but a slew of new single-serve, sea- though its Original and Double sonal and better-for-you offerings Chocolate Pound Cake Slices come in could help turn things around. six-count packages that can take consumers through a week of lunches. BY DENISE LEATHERS ! e individually wrapped desserts have proven so popular, says assistant lthough cheesecake sales brand manager Angie Dobrofsky, continue to expand (+3.4% to that the company plans to add both A$29.35 million), the rest of the Classic and Strawberry Cheesecake frozen desserts category struggled Slices in January. Not only do they during the 12 weeks ended July help prevent overindulgence, “In- 12, reports Chicago-based market dividual desserts broaden potential Delizza rolls out two seasonal cream research fi rm IRI. Compared with the usage by allowing consumers to have pu! varieties for the fourth quarter: same period a year ago, dollar sales of a treat anytime without defrosting Pumpkin and Eggnog. sweet goods tumbled 5.7% to $46.17 an entire pie or cake,” she explains. million while sales of frozen pies fell “! ey also off er variety because to off er guests a variety of options 1.0% to $94.33 million and pie/pastry unlike a full pie or cake, they don’t — similar to restaurants that off er shells 0.3% to $23.55 million. require the whole family to eat the dessert fl ights, says Colleen Moreno, Suppliers say competition from same thing.” national sales manager at Stockton, in-store bakeries and consumers’ ris- Calif.-based Boboli International ing health consciousness are taking MINIS COME UP BIG (www.boboli-intl.com), maker of the a toll. Lifestyle changes are hav- Single-serves are hot, but some Patissa brand. In fact, she continues, ing an eff ect as well. As consumers manufacturers have taken the trend the company’s assortment of mini move further a step further, Napoleans, Latte Macchiato slices away from rolling out bite- and mini chocolate and vanilla cream formal din- size mini versions puff s is a big seller during the holi- ners followed of favorite des- days. ! is year, the company will add by dessert, the serts. For exam- another option to its holiday lineup: category has ple, Kennesaw, Peppermint Bark Cream Puff s. “Lim- taken on more Ga.-based Atlanta ited-time, seasonal off erings help of a “special oc- Cheesecake Co. create excitement in the category,” casion” feel. But (www.atlanta says Moreno. And consumers know manufacturers cheesecakeco. that if they don’t buy now, it may not are working com) is rolling be there tomorrow. hard to make out three varie- Fred Liggero, vp of sales and desserts more ties of Cheesecake marketing at Battleboro, N.C.-based of an everyday Bites (New York, Delizza Patisserie (www.delizza.us) occurrence. Strawberry and couldn’t agree more. In fact, he says, For consumers who want just a One strategy Chocolate) this his company is also rolling out two small portion, Atlanta Cheesecake that seems to month, reports seasonal cream puff varieties for the Co. debuts Cheesecake Bites in have legs: marketing man- fourth quarter: Eggnog and Pump- three chocolate-covered # avors. single-serve op- ager Marty Birch. kin. “We tested them last year and tions for small “Portion control is got some very strong commitments households as well as those who key,” she explains. “With cheesecake from the trade,” he reports. “We don’t want to be tempted to overeat bites, consumers can enjoy the great expect it to be a very good holiday by a whole cake or pie. In fact, one taste they love without the guilt.” In season.”

SEPTEMBER 2015 www.frbuyer.com 55 SPOTLIGHT: DESSERTS

! e pie side of the category is also jumping on the A growing number of consumers are also looking for seasonal desserts trend. For example, Omaha, Neb.-based desserts that are allergen-free as well, particularly gluten- ConAgra is adding a Pumpkin Pecan Streusel Pie to its free. “We’ve been doing a gluten-free frozen unbaked pie Marie Callender’s lineup (www.mariecallendersmeals. shell (also free of other allergens) for three years, and it’s com) this month. A mash-up of two popular fall fl avors, likely to become our No. 1 product this year,” reports Doon the new vari- Wintz, president of Chester, N.J.-based Run-A-Ton Group, ety features a maker of the Wholly Wholesome lineup (www.wholly pecan streusel wholesome.com), which recently began off ering gluten- topping that free products under a separate label, Wholly Gluten-Free consumers by Wholly Wholesome. While Wintz says only about 5% apply them- of the U.S. population suff ers from a food allergy, families selves during with just one allergic child often buy allergen-free for the the cooking entire household. “So it’s much bigger than the numbers process, off ering the kind of involvement many frozen Bittersweet News dessert us- Boboli International adds an on-trend ers crave, says brand manager in Commodities Sea Salted Caramel variety to its Patissa BY MONICA GELINAS & DENNIS COLLINS cream pu! collection. Matt Stejskal. “! e more interaction consumers have with the cooking, the more ust as chocolate desserts can be bitter or sweet, so they feel it’s their own,” he explains. are current input costs to produce them. ! e category’s increasing seasonality means more fre- JOn the bitter side is the skyrocketing cost of co- quent resets, which presents a problem for some retailers, coa. Since mid-2014, cocoa prices have lingered near says Stejskal. “We see many retailers only reset the cat- highs that haven’t been seen for more than 10 years, egory once a year, so they really miss out on the opportu- refl ecting a combination of production issues and nity to change with the seasons and the buyers’ tastes.” better-than-expected demand amidst sundry global economic problems. SEA SALT CARAMEL CREAM PUFFS ! e current El Nino phenomenon in the Pacifi c, While pumpkin and eggnog are big around the holidays, which typically results in dry conditions in major other fl avors are fi nding a permanent home in manu- West African producing countries, could further facturers’ frozen dessert lineups. For example, Boboli is compound problems by damaging the cocoa crop adding Sea Salt Caramel Cream Puff s to its Patissa collec- growing now. tion this month. ! e on-trend variety features caramel- Although evolving supply and demand will ulti- fl avored cream in puff pastry enrobed in chocolate and mately determine pricing, we expect cocoa prices drizzled with sea salt caramel. Moreno says more variety will push somewhat higher. every day is one of the keys to reinvigorating the frozen However, sugar prices represent the sweet side of dessert category. “! ere tends to be a lot of duplication — dessert production costs. While the price of sugar three of four [brands] of everything — which takes away on global markets is trading at multi-year lows, U.S. space for unique, new varieties that might attract non- government intervention programs keep our prices dessert buyers to the door.” higher — but still lower than a year ago. ! is sup- But uniqueness alone isn’t enough to warrant a spot on ports our outlook that food companies should be the shelves, she adds. “Retailers should be aware of what’s able to lock in lower sugar prices for 2016. in the products they’re bringing on.” Increasingly health- ! e popularity of sweet-savory fl avor profi les conscious consumers want their splurges to be “worth like salted caramel and spicy-heat ingredients like it,” she explains, so a clean ingredient panel is a must. cayenne or chili are helping producers balance recipe “! at means real cane sugar instead of high fructose corn development costs. And smaller portions of more syrup, no artifi cial colors or fl avors, real eggs, fresh dairy decadent, higher-end desserts are allowing them to manage premium prices. Q cream, etc.” “Although desserts will never be included in the Monica Gelinas ([email protected]) is founder ‘healthy’ category,” agrees Atlanta Cheesecake’s Birch, of Gritwork, LLC, while Dennis Collins (dcollins@ “the clean label trend is likely to grow.” As a result, she trilatinc.com) is a director at Trilateral, Inc. ! ey continues, all of the company’s products will be free of provide purchasing and risk management advisory artifi cial fl avors, colors, partially hydrogenated oils and services to the food industry. preservatives by next month.

56 www.frbuyer.com SEPTEMBER 2015 NEW!

Here’s why retailers nationwide are sweet on

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Delizza Ad_aug2013.indd 1 8/7/13 11:48 AM SPOTLIGHT: DESSERTS

suggest — and abso- says company president Kevin McAdams, citing lutely growing.” demand for simple rather than complex fl avors. To meet rising Schwan’s took the same approach to its new Ed- demand for gluten- wards Triple Coconut Crème Pie, a classic dessert free desserts, Wholly updated to meet the needs of today’s consumers (it Wholesome recently comes in a baked cookie crust). introduced gluten- Classic desserts are also taking center stage at free brownies “as Sara Lee where pound cake remains a top seller. good as any you’ll fi nd Last fall, the company added a Blueberry variety for the same money, to the mix. And this year, it will bring back Gin- gluten-free or not,” gerbread for the holidays, reports Dobrofsky. “Our says Wintz. “Consum- pound cakes taste great alone but can also easily be ers shouldn’t have to customized for any occasion with just a few ingre- sacrifi ce their taste dients such as berries, whipped cream or sauces,” standards for their Schwan’s expands its Edwards allowing consumers to present them as “their own,” ingredient standards.” cream pie lineup with two “back- she explains. Retailers that don’t to-basics” # avors: Triple Coconut Liggero says tie-ins with complementary prod- ask them to are often Crème and Vanilla Caramel Crème. ucts through displays, cross-couponing or advertis- rewarded with fi erce ing are a great way to drive traffi c to frozen des- loyalty. “People with food allergies often have a tough serts, which don’t have the same visibility as fresh-baked time fi nding anything good to eat,” he explains. “But if items around the perimeter. Cross-merchandising also you can meet their needs, they will become a very valu- makes life easier for busy shoppers, he adds. Q able customer.” Shipped frozen, the brownies can be FROZEN DESSERTS sold frozen as well Sales in supermarkets, drugstores, mass merchants, military commissaries and select club and dollar stores combined for the 12 weeks ended July 12, 2015, according to IRI (@iriworldwide), a Chicago- or thawed and sold based market research fi rm. Percent change is versus the same period a year ago. Manufacturers with via in-store bakeries. less than $1 million in sales are not listed. Watch for gluten-free CATEGORY $ SALES % CHG UNIT SALES % CHG VOLUME % CHG chocolate chip cook- PIES $94,332,024 (1.0) 22,386,118 (4.6) 30,532,692 (4.7) ies later this year, Schwan’s $48,639,876 1.6 10,569,848 0.2 14,845,038 (1.9) says Wintz. ConAgra $36,247,568 (1.1) 10,084,495 (6.5) 12,831,150 (2.3) TRADITIONAL Hillshire Brands $4,535,877 (21.7) 822,894 (24.6) 1,540,856 (24.3) WITH A TWIST Private Label $2,112,788 19.4 509,297 9.3 615,195 (17.1) While Sea Salt SWEET GOODS-NO CHEESECAKES $46,166,304 (5.7) 10,958,471 (8.0) 11,836,433 (4.5) Caramel and other Pepperidge Farm $14,238,562 2.9 4,267,771 2.1 4,797,913 3.3 hot new fl avors Hillshire Brands $8,344,366 (6.9) 1,919,757 (6.0) 1,575,454 (10.0) bring much-needed Private Label $5,028,917 (0.4) 873,649 (7.5) 1,044,578 0.8 excitement, famil- Delizza Patisserie $4,961,193 (1.8) 983,762 (4.7) 870,746 (4.9) iar desserts remain ConAgra $3,945,191 (12.7) 1,062,232 (25.6) 977,032 4.5 popular as well, Poppie’s $2,622,905 30.7 490,715 21.9 762,083 34.2 sending manufac- Schwan’s $1,819,323 (27.2) 396,476 (29.2) 796,662 (33.7) turers in search of CHEESECAKES $29,351,792 3.4 4,048,279 (1.2) 6,142,555 1.1 “the next big thing” Private Label $9,662,356 24.9 995,605 24.5 2,207,465 18.6 back to their roots Hillshire Brands $7,426,558 (12.8) 1,253,696 (13.8) 1,653,153 (14.3) for inspiration. For The Cheesecake Factory $4,992,298 34.5 322,975 33.9 825,968 21.4 example, Schwan’s re- Schwan’s $3,572,859 58.0 802,576 39.6 802,981 64.6 cently added a Vanilla Lawler Foods $1,567,921 (49.6) 144,064 (51.2) 312,828 (50.2) Caramel Crème Pie PIE/PASTRY SHELLS $23,554,456 (0.3) 8,356,144 (2.4) 5,879,961 (2.2) to its Edwards lineup. Private Label $7,262,864 (6.5) 3,134,580 (6.0) 2,351,486 (7.4) Infused with caramel Pepperidge Farm $6,586,948 8.0 1,328,685 7.7 1,340,156 9.0 and topped with pe- General Mills $4,304,988 (1.3) 1,512,641 (1.4) 1,077,010 (1.4) can pralines, “[It’s a] ConAgra $1,233,133 (14.2) 319,814 (18.0) 319,814 (18.0) back-to-basics fl avor, Athens Baking Co. $1,065,610 (3.1) 510,353 (4.7) 60,630 (4.7) but with a twist,”

58 www.frbuyer.com SEPTEMBER 2015 LOGISTICS

example is delivery frequency. By focusing on the number of deliveries we make to customers’ locations as well as GOOGLE GLASS the size of the delivery, we believe we can considerably improve the utilization of our assets by making sure our ROLE IN LOGISTICS trucks are full. Year-to-date, we have taken more than 5,500 stops and 192 distribution assets out of our IS EYED distribution system. Go ahead: Google “Google Glass logistics.” When we did, “Each of these represents more than a 3% reduction. we got more than two million hits. When looking at our operations and logistics together, It seems that one company is planning to replace hand- the rate of our year-over-year landed cost per gallon held scanners with Google Glass, the new-fangled glasses growth took a step down in Q2 to 1.6%. ! is improve- that let you do everything but, perhaps, make toast. Exel, ment is largely refl ective of our cost productivity agenda part of the as well as lower fuel costs, off set by the impact of our con- supply-chain scious decision to incrementally invest a modest amount division of back into our supply chain this quarter.” Q Deutsche Post DHL Group, plans ROAR LOGISTICS to fi t the glasses with ADDS SERVICES warehouse ROAR Logistics, Inc, a subsidiary of Buff alo, N.Y.-based management Rich Products Corporation, has been granted a corporate software in customs broker license from two United United States Customs and States ware- Border Protection, Department houses later of Homeland Security and received authorization from If all goes according to plan, Google this year. the Federal Maritime Commission to operate as a Non- Glass will be able to read barcodes and “! e tech- Vessel Operating Common Carrier (NVOCC). tell workers the fastest route to " nd nology like “NVOCC status allow us to leverage the volume of our products. Google Glass customers’ ocean business as a whole, thus providing could prove competitive service off erings normally only available to especially useful during peak periods when Exel hires large and mega-size multi-national corporations,” said thousands of temporary workers,” Adrian Kumar, vp for Nancy Dempsey, director of international operations. solutions design with Exel, told ! e Wall Street Journal. ! e new licensing provides customers of ROAR with a “! ese are people off the street who are not familiar diverse portfolio of international transportation services with our warehouses, do not know where anything is, and that builds upon the established domestic transportation we see huge potential for that type of situation, especially off erings and creates additional opportunities for closer with training,” Kumar said. partnerships with their clientele. If all goes according to plan, Google Glass will be ROAR, by the way, is an acronym for Rail, Ocean, Air able to read barcodes and tell workers the fastest route and Road. Q to fi nd products. DHL has successfully tested smart glasses and augmented reality in a warehouse in the Netherlands. Q JOHNSTON ACQUIRES ECONO-RACK DEAN FOODS’ CEO G.N. Johnston Equipment Co. Ltd., Mississauga, Ontario, an authorized sales and service center of ! e Raymond ON LOGISTICS COSTS Corporation, has acquired the assets of ! e Econo-Rack Gregg Tanner, CEO of Dean Foods, speaking at the Aug. Group Inc., now its wholly owned subsidiary. 10 second-quarter security analysts’ conference call: Brantford, Ontario-based Econo-Rack is the leading “As it relates to our logistics network, we are focused on Canadian manufacturer and dealer of racking and related increasing the use of routing tools and software to enable material handling products and services. Raymond Corp., route optimization and driver productivity. But we can Greene, N.Y., is a global provider of material handling also improve effi ciency through indirect methods. One technology, expertise and support. Q

SEPTEMBER 2015 www.frbuyer.com 59 LOGISTICS

out-of-stock on 8% to 10 % of its product anyway, it may as WALMART SHIFTS well hold inventory centrally and clean out the backroom.” —Ron Margulis, managing director, RAM MORE GOODS TO DCs Communications Less product in backroom is seen improving supply “I remain surprised that the world’s largest retailer, chain fl exibility, improved in-store effi ciencies. with the resources they have, has not fi gured out inventory management to a more advanced level than this latest almart recently announced that it is holding move indicates. It would seem that smarter forward buy- more inventory at its distribution centers ing and having better handle on space allocation at the Wrather than in store backrooms to improve store would go a long way to solving many of Walmart’s fl exibility across its supply chain and to improve opera- inventory issues as well as improve chronic problems tional effi cien- with their in-stock position.” cies in its stores. —Mark Heckman, Principal, Mark Heckman ! e changes Consulting have resulted in “While it sounds cynical, manufacturers used to (and total inventory growing at the rate of 2.2%, signifi cantly probably still do) pad their numbers by pushing goods slower than the 4.8% gain in re venues in the quarter. into the distribution channel to infl ate sales (i.e., “stuffi ng Comp store inventory declined 2.4% versus last year. the channel”). I’ll assume that all the goods in the DC are Our pals at RetailWire (www.retailwire.com), the daily inventory versus “consigned.” Could a retailer providing online discussion forum, asked its readers to comment on space to better position supplier goods be doing the same Walmart’s shift, and polled them on how successful they thing, but in this case to manage its inventories?” think the change will be. —Phil Rubin, CEO, rDialogue INSTANT POLL: “Either Walmart feels that the fl exibility of shipping How confi dent are you that carrying more inventory in is such that they can quickly replenish the backroom to

warehouses will help Walmart prevent store understocks prevent out-of-stocks, or they are so thin in store person- Q across its stores? nel that putting products in the backroom actually makes things worse in terms of moving products to the front of Very confi dent 16% the store… But I do wonder about the tradeoff risking of Somewhat confi dent 16% out-of-stocks in the store.” Somewhat doubtful 32% Doubtful 26% —Kenneth Leung, Director of Enterprise Industry Not sure/No opinion 11% Marketing, Avaya QQQQQQQQQQQQQQQQQQQ “Consolidating more inventory in the DCs means the retailer needs less inventory to service the same amount of business nationwide (that’s a huge reduction in work- SNOTEMP EXPANDING ing capital). It means that the retailer is more fl exible in Eugene, Ore.-based SnoTemp Cold Storage plans to getting the right products to the right stores, based on de- open a 110,000-square-foot addition to its warehouse mand and not on forecasts from a headquarters. It means in Albany in late May or a reduction of obsoles- early June of next year. cence of inventory (and It is the eighth expan- 80% price reductions) sion of the facility since 1974. About 90,000 square feet on products caught in will be devoted to frozen space. SnoTemp freezes and stores with limited demand for them. As an aside, I often stores bulk vegetables and ingredients for repackers wonder how many of those shelf out-of-stocks are a result such as NORPAC FOODS and processors of products of the items being lost in the back room.” including ice cream and desserts. Q —Gene Detroyer, professor at ! e European School of Economics. “I was in a superstore near Denver last month and 3PL PROVIDERS TARGETED witnessed a backroom in total disarray. Product every- More than $1 billion in venture capital has been invested in where, the receiving clerks working several loads at a time tech startups focused on freight forwarding since the start and employees looking for items visually. ! e move isn’t of 2014, according to ! e Wall Street Journal. Most of them surprising, as much of the eff orts to boost in-stock rates aim to help shippers fi nd the right combination of transpor- by fl ooding backrooms with merchandise have had little tation as well as complete all the paperwork involved. ! e success. I guess the theory is if Walmart is going to be startups aim to replace third-party logistics providers. Q

60 www.frbuyer.com SEPTEMBER 2015 National Reach, Local Connections

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in 2013, so Liz took the job she was know what I was thinking — starting off ered and once again saw little a business is stressful, and so is hav- long-term opportunity. “I was kicking ing a baby,” she says. ‘THAT’S butt. I made them $400,000 in profi ts Baby and business are both healthy in 10 months, but they were making now, but there were some bumps LIZGISTICS!’ it harder and harder for me to grow along the way. Her husband Chad or make more money. So I thought (“my No. 1 fan”) was one of 500 who How one woman took a gamble to myself, ‘How hard can this be?’ lost his job on the same day at a large (and won) in the male-dominated I worked nights and evenings on a fi nance company. So together, he and logistics business. business plan, and got approved by Liz attended last October’s conven- the bank for a loan.” tion of the National Frozen & Refrig- iz Hawblitzel was in the mid- But fi rst there was another stop: erated Foods Association and hoped dle of a job interview for a the hospital delivery room. “Getting Lizgistics would take off . Lfreight brokerage position a my own business was so important Slowly but surely, it did. “It was couple of years ago when she had to me,” Liz recalls. “I can be really a tough time. I wasn’t making any an epiphany. She was money, and he had only telling how she once a couple of months’ convinced a truck severance. I had a non- driver to go to New compete clause with York City for her after my former employer, so the driver had refused I couldn’t reach out to to go there under any any of my old clients. circumstances. At the NFRA, I’d get Liz heard herself calls and my husband telling the interviewer, would take over the “that’s Lizgistics.” ! e baby. It was kind of seed of an idea had scary, but my family been born. Already a was with me all the proven freight broker in way. All along I’ve been the industry she loved, blessed with people she had been fi nding who helped me, or I’d it diffi cult to gain the have been laying face- experience she needed fi rst in a puddle.” to grow her career. She met someone She’d hit the glass who helped her with ceiling several times software that helped already, and it hurt. To her book LTL loads and get where she wanted, she knew right driven. I was on the delivery table at track fi nances. Friends from previous then that she’d have to go off on her 10 a.m. making calls for the insur- jobs she’d had in logistics encouraged own someday. ance for my new company, and my her and off ered advice. Chad helped “If you don’t take a chance in life daughter Khaleesi was born at 3:30.” her fl edgling business take fl ight, and in your career, you’ll always work for Two and a half months later, Liz- then went on to an enjoyable job that someone else who did. I didn’t want gistics LLC was also born. It turned paid better than the one he’d lost. to be 20 years down the road and a profi t within six months and has CHALLENGE & FREEDOM ‘If you don’t take a chance in life in your career, And Liz loves the challenge and freedom of being an entrepreneur. She you’ll always work for someone else who did.’ may work crazy hours sometimes, but she can also take time off to go wonder if I could have done this,” been growing ever since. But Liz says on a school fi eld trip with her daugh- says Liz, now president and founder that while the fi rst year was the best ter if she wants. of St. Louis-based Lizgistics, the suc- year of her life, it was also the most “It’s been a great experience,” she cessful full-service freight brokerage diffi cult and stressful. says. “I’ve learned above all that if specializing in LTL. “I don’t know what fool would start you’re not moving forward, you’re But the timing wasn’t right back a business with a new baby. I don’t moving backward.” Q

62 www.frbuyer.com SEPTEMBER 2015

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